An unprecedented wave of investment in town centres will fail to reverse the long standing migration of retail sales from town centres to out-of-town retail parks, says a new report. The huge amount of space set to arrive in town centres is arriving at the worst possible time and could create more problems than it solves. Though out-of-town retailing has been harder hit than town centres by the current downturn, landlords and retailers alike have made a concerted effort to improve the out-of-town shopping experience. For this reason the report expects out-of-town to bounce back and lead the recovery.

Out-of-town locations will have much more success than town centres in instigating a retail renaissance, through improvements to the mix of retailers and facilities on offer. Currently retail parks have a high exposure to big ticket retailers. This means they are more vulnerable to the consumer downturn – with disposable incomes increasingly squeezed by ever rising living expenses, consumers are shunning major purchases. But it is these very difficulties that will prove the catalyst for their evolution and future successes.

Out-of-town retailing will have to become a more attractive shopping location, appealing to a broader spectrum of society and shoppers. The key to its future growth lies in improving facilities and a greater choice of shops that collectively generate high levels of footfall, longer dwell times and higher spend per head.

These enhancements will see out-of-town retailing emerge from the current consumer downturn a more desirable and compelling shopping location. Retail parks that develop a attractive and compelling mix of retailers, and a higher concentration of fashion and general merchandise retailers will fare best, while those that enhance the offer with cafes and restaurants, will outperform those that fail to improve the customer experience. Overall it is expected that out-of-town sales will grow by 23.2% over the next five years – dwarfing the miniscule 0.4% sales growth from town centres.

Related research: European Out-of-Town Retailing 2008