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Out-of-town retailers to cash in on trading boom

Fashion retailers such as Next, New Look, TK Maxx and Matalan are set to benefit from a predicted sales boom at out-of-town shopping centres over the next five years.

According to a report from consultancy Verdict Research, out-of-town retail sales will rise by 23.3% over the next five years, compared with a rise of only 0.4% in town centres.
The report said out-of-town locations would be better placed to come out of a downturn thanks to an increasingly comprehensive range of fashion and general retailers, improved shopfits, and more cafes and restaurants which increase time spent at the outlets by shoppers.

Verdict senior analyst Malcolm Pinkerton said recent footfall dips at out-of-town locations because of rising petrol costs was a short-term situation.

He said: “Town centres are pretty mature retail markets, while out-of-town sites are creating more smaller units, as big-ticket retailers such as DIY chains move out [of the parks].

“These centres are becoming high-quality retail space but with more convenient transport and parking. There will be a better mix of retailers in the future with smaller average store sizes which are more suitable for fashion retailers.

Pinkerton added that fashion retailers would need to create a high-quality format of at least 5,000sq ft to operate well in out-of-town locations.

“Next and New Look already have out-of-town formats, the larger Arcadia brands are likely to benefit, and Zara is moving into the market more,” he said.

On location:
Predicted five-year retail space growth to 2012:
Total 5.8%
Town centre 6.3%
Out of town 9.1%
Neighbourhood 3.4%
(local shopping streets)

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