Outlet centres in the eyes of the Polish consumers
Colliers International and IQS examined the potential and development perspectives of the outlet centres market in Poland
Warsaw, 25 April 2017 - 8 out of 10 people visiting Polish outlet centres do their shopping there, spending on average over PLN 240 during a single visit. Outlet centres in Poland differ from those in Western Europe, albeit they enjoy big popularity among consumers. There are also good perspectives ahead of them, as their offer is “built to suit” the domestic retail market. What will support further development is the introduction of complementary functions and services, which will improve comfort of shopping and increase the attractiveness of outlets – according to a report by Colliers International entitled “Bargain hunting. The potential of outlet centres in Poland”, which was prepared in cooperation with IQS.
Consumers visit outlet centres on average 3-4 times a year and during a single visit they spend there on average over PLN 240. Inhabitants of smaller towns are more eager to do their shopping in such venues. Consumers most frequently visit clothes shops, therefore there should be no outlet centre without fashion brands among the tenants. These type of stores, being a pillar of outlet centres, are visited by 90% of consumers.
For the majority of consumers (70% of respondents) outlet centres are a place of planned shopping. However, a number of consumers, particularly from smaller towns, do their shopping spontaneously. Stores, operating at outlet centres, have highest frequency of visits and generate highest turnover during weekends (roughly 40% per day on Saturday and Sunday), while solely approx. 20% account for weekdays. According to the authors of the report, potential introduction of Sunday-shopping ban would very negatively impact this market segment - this could be a punch for stores operating in an outlet formula.
“I have been analysing Polish consumers’ attitudes towards outlet centres since a few years ago. First outlet schemes in Poland were opened in the atmosphere of enthusiasm, intertwined with curiosity and mistrust. Majority of Polish consumers are currently aware of how these schemes work and what to expect from them, which has been reflected in the survey conducted by our company and Colliers International”, says Agnieszka Kowalewska, Shopping Center Research Manager, IQS.
Attracting the client
According to the report, outlet centres in Poland will most likely remain different from those known from the Western European countries for a long time. The main reason behind such a state of affairs is the absence of sufficient “critical mass” of trade and clearly lower than in the West purchasing power of the population resulting in the lack of premium brands in the Polish market. Nonetheless, Polish outlet centres draw on European experiences in order to create “bargain-hunting” fashion. The authors of the report reckon that about 60-80 retail chains operating in the Polish market have enough shops with sufficient stock to manage to open their points of sale in outlet centres in major cities throughout the country.
“Outlet centres are in for extension with complementary functions capable of attracting consumers. Depending on location and specific market characteristics, these will be provided by large-surface grocery and non-grocery shops, cinemas or other supplementary functions. Besides extensions, there will be solutions introduced to outlet centres, including new technologies, to improve the comfort of shopping”, says Katarzyna Michnikowska, Research and Consultancy Services, Colliers International.
State of the market
At present, there are 14 outlet centres in Poland, operating on the total lease area of about 250,000 sqm. These are small and medium-sized facilities (10,000 - 25,000 sqm gross leasable area), usually developed in stages. They currently have over 380 tenants operating about 1,150 shops, service and gastronomic points. Each of the outlet centres offers on average 90 100 units, and the average area of a shop is 150-200 sqm. The greatest group of tenants in outlet centres are entities from the following sectors: fashion mix (55 entities) as well as cafes and restaurants (45 entities).
Polish outlet centres are generally located on the outskirts of the largest agglomerations. Recent years have also seen investments in regional towns such as Białystok (Outlet Center Białystok, Outlet Białystok), Bydgoszcz (Outlet Center Bydgoszcz, Metropolitan Outlet) and Lublin (Outlet Center Lublin). As a result of repositioning of one of the centres in Rzeszów, another outlet centre is being prepared (Outlet Graffica).
The average lease length for space at outlet centres is 3-10 years. The average rent for a 100 250 sqm unit stands between EUR 7-27 sqm/month.
The survey was conducted with the use of the CAWI technique in February and March 2017 on a sample of outlet customers aged 18 and more, inhabitants of towns and agglomerations with outlet centres operating in their territory during the survey. The respondents participated in the IQS OPINIE.PL online panel.