Outlets buck retail trend and report record results

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Realm, the market-leading operator of outlet retail schemes in the UK, has reported the number of visitors to its schemes rose by 10.7 per cent in the first half of 2017, with footfall peaking over the Easter period, increasing by 18 per cent compared to the same period the year before.

Despite the more challenging national retail picture, the outlet sector continues to enjoy unprecedented levels of growth. UK outlet retail sales amounted to £2.6 billion in 2016, an increase of 8.8 per cent on 2015. Consistent with this trend, Realm-managed schemes have enjoyed a 10 per cent increase in total sales over the first half of 2017 and this is set to continue over the remaining six months.

The discount schemes have enjoyed unparalleled success over the key trading weekends in this period, including Easter and both May Bank holiday weekends. Total sales at Realm-managed schemes increased by 19 per cent in the three trading weeks shouldering Easter Sunday, in comparison to the corresponding Easter period last year. This strong performance continued in May with sales across the portfolio of Realm-managed outlet centres up 4.5 per cent during the first May Bank holiday weekend, nearly doubling to 8.4 per cent across the second May Bank holiday weekend.

In this period, the cosmetics sector was the standout performer with occupiers reporting sales increases of 23.5 per cent in Q1. Fashion retailers on the whole are performing well, with athleisure and sports still crossing category boundaries and showing double-digit growth across all its Realm-managed locations.

At the busiest trading period over the Easter weekend, Dalton Park, in County Durham, saw the largest number of shoppers, with performance up 30 per cent, whilst London Designer Outlet, in Wembley, recorded that sales over Easter were up by 26 per cent. City centre outlet schemes, like London Designer Outlet, have particularly generated interest in outlet shopping through their offering of a combination of retail and leisure activities, and the ease of access by public transport, particularly for younger consumers.

Colin Brooks, Managing Director of Realm, commented: “Outlet shopping has become very much part of normal retailing habits over the last five years. We have seen an increase in footfall across the board, in spite of consumers’ more prudent spending habits, and importantly this has been converted to spend at each scheme. Repeat visits are also on the up – traditionally, our customers would visit an average of four times per year, but our research now shows that 30 per cent of customers visit six times a year and 25 per cent of footfall visit 12 times a year or more.

“We can attribute this success to an increased focus on creating retail experiences by investing in aesthetics to create a higher quality environment and trained management staff to maintain retail standards. Retail brands are now following suit and are investing more into their outlet shop fits to make them consistent with their full-price offer, so we expect to see this success continuing over the next few long weekends and into the summer.”

Outlet retailing is fast emerging as a growth inducing retail sub-sector, thanks to its largely internet-proof format and consumers becoming more value focussed in the post-recession period. Average outlet rents increased by over 10 per cent in 2016 alone, particularly in popular urban locations. The outlet market is dominated by a small number of leading operators and developers who have consistently reported robust sales growth, particularly in recent years as consumers view outlet retail to be more about quality and value, as opposed to discount.