An Outlet for Extended Christmas Sales


Shopping for premium brands at Christmas can be made more affordable if done in factory outlets. This market has been performing far better than general retail in Europe and Hungary as well, with the festive season providing a solid base for annual double-digit growth.

Csaba Imre, center manager of Premier Outlet Budapest.

The outlet market is different from general retail in many aspects, and that applies for its Christmas season as well. Starting with Black Friday and running until mid-March, the Christmas sales period here is significantly longer than in it is shopping malls or street stores.  

The month of December accounts for about 10-11% of annual sales both on the general and outlet retail market, says Csaba Imre, center manager of Premier Outlet Budapest. Yet, unlike retail, in the outlet market it doesn’t fall right back in the period immediately afterwards, he adds.  

Large-discount sales kick off right after Christmas to stoke interest; in January, sales decrease to 5-6% of annual turnover, before increasing to roughly 7% by March when the final sales take place. The amount of discount offered ranges from 30-70% (December) and 50-70% (January and February) to up to 80% in March.  

So the peak season runs from November to March, at least in Hungary. In different markets, for example, at Cinqueterre in Italy, peak season coincides with the high summer season in tourism, says Thomas Reichenauer, managing director of Retail Outlet Shopping, which manages the Premier Outlet Budapest center in Hungary.  

As trade ramps up, marketing activity is getting more intense in the run-up to Christmas. Beyond the use of tools such as billboards, radio ads and social media channels (including bloggers and social influencers) there are, of course, Christmas decorations and LED-lighting and a Christmas market with stands selling food and beverages and small artisan products. Because of the location (at Biatorbágy, Budaörsi út 4, about 20 km west of central Budapest), it is easier to recreate the ambience of a rural Christmas street or market, Imre says.  

More Than Shopping

Shopping habits are also different from those detected in retail stores or shopping malls. Because of its location, roughly eight out of ten visitors end up buying something when visiting the shop as opposed to, say, a mall where there is a lot more window shopping.  

This explains the owners’ strategy of turning the outlet from a place of purchase to a place where shopping is only part of the program. In line with international trends, they want to attract more visitors by providing an amusement center with restaurants and programs for families.

After Christmas, tactical marketing becomes more enhanced. “We need to communicate the bargains one can get here, the advantage of shopping at our outlets,” Imre says.  

Unlike luxury brands, the catchment area for premium brands is smaller, Imre says. This is because customers of luxury brands tend to be willing to travel further to reach a shopping destination (even going abroad, if necessary).  

“We are not targeting luxury brands here,” says Reichenauer who used to be managing director of the Parndorf outlet center in Austria, which does sell luxury brands. To have a luxury outlet market a strong high street is needed, which Budapest is currently lacking, Imre says.  

The aim is to convert the location into a shopping/entertainment center. This Christmas it is the market with small wooden cottages and mulled wine, lighting and decoration that serves that purpose. Afterwards, the site will undergo a facelift, with the restaurant and many other parts being revamped.

The center saw 67% growth between 2011 and 2016. Spending per person has increased by 40% since 2012. In the past three years, the growth rate has been more than 10%, which suggest that some of the turnover of general retail has shifted to this segment, Imre says.
The addition of many more brands to the existing line-up, 19 since fall 2016 contrary to roughly two per year before, has also helped increase revenues. By next year, the management aims to have 20% more visitors.

Outlets Growing Despite Online Challengers

Despite a relatively high density and the effects of online shopping, the market for outlet centers in Europe is still increasing at a constant rate. Indeed, it has been outperforming the general retail market in growth terms.

According to data by consultancy FSP, today there are 213 outlet centers operating across Europe (excluding Turkey), with total provision of 3.7 million sqm. In the last decade, the provision of outlet floor space in Europe has increased by nearly 50%, FSP says. 

Outlets are one off the most successful retail channels for growth, according to the industry report. Sales have risen by 45% from EUR 11.5 billion in 2013 to EUR 16.4 bln in 2017, ten times the general rate of growth in European retail sales. Luxury outlets lead on performance, with 46% more growth than the industry average.

Some markets are performing better than average, including those of Hungary and Poland, The main reasons for growth are a less saturated market and the above-average increases in salary rates, says Thomas Reichenauer, of Retail Outlet Shopping, which manages the Premier Outlet Budapest center in Hungary. 

Even in more saturated markets, such as the United Kingdom or France, outlet stores still have some growth potential, experts say.

HBLF Recognizes Diverse and Fair Workplaces Analysis

HBLF Recognizes Diverse and Fair Workplaces

EC to Propose Opening Excessive Deficit Procedure Against Hu... EU

EC to Propose Opening Excessive Deficit Procedure Against Hu...

Uni of Miskolc, CATL Debrecen Sign Cooperation Agreement Deals

Uni of Miskolc, CATL Debrecen Sign Cooperation Agreement

Int'l Travelers to Europe Prioritize Safety, Quality This Su... Tourism

Int'l Travelers to Europe Prioritize Safety, Quality This Su...


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.