The inside dope on outlet malls

The inside dope on outlet malls

Not everything is a bargain, but if you go with eyes wide open, you’ll score some good deals

Published: October 2014

You’ll find lots of holiday festivities at most outlet malls—carolers, cocoa, Santa and his photo-snapping elves. And for the fifth year in a row, shoppers at the Outlets at Anthem mall in Phoenix can get a neck ache taking in the nation’s tallest Christmas tree. (It was 115 feet last year, 39 feet taller than the tree at Rockefeller Center.)

But are outlets the best place to do your shopping over the holidays—or any time of year? To find out, Consumer Reports surveyed 15,789 readers who made 25,441 visits to outlet stores. The results—shown on our Ratings chart—rank 53 of the biggest outlet chains on value, quality, selection, and help. We also hit the outlets ourselves, spending more than $2,600 on kitchen appliances, cookware, electronics, food, luggage, and kids’ clothing.

The takeaway: Some outlets offer serious bargains on well-made merchandise sold by a knowledgeable and solicitous staff; others stock so-so goods at so-so prices. And, surprise, we found a few items at retail stores that cost less than identical outlet items. 

Outlet malls certainly are big business—and getting bigger, because even though the worst days of the recession are over, consumers still demand bargains. From 2006 through 2012, the amount American shoppers spent at outlet centers grew 41 percent, vs. 9 percent for traditional malls. By the end of this year, 50 new outlet centers will have been built since 2006; only three new retail malls have opened in the past eight years. The industry estimates that consumers will spend $42 billion in outlet stores this year, up from $24.3 billion in 2012.

Outlet shopping has also become more convenient. In the past, centers were built far from full-price stores in big cities to avoid competing with them. But retailers have seen that outlets actually complement their retail business, so more chains are building in or close to big cities, says Linda Humphers, editor of the trade publication Value Retail News.

But for many of us, it’s still a schlep. In our survey, 34 percent of outlet stores where readers shopped were more than 50 miles from their home; one in five were more than 100 miles away.

We found differences between the outlet and retail versions of the Coach Hobo bag.

The goods are mostly good

Overall, 67 percent of our readers said that they were completely or very satisfied with their experience, up from 60 percent in 2010, the last time we did an outlet survey. That’s on par with our readers’ scores for general-­merchandise stores such as Costco, Kohl’s, and Target. And shoppers liked a range of stores. Their top-rated choices: Bon Worth, L.L.Bean, Haggar, Carter’s, OshKosh B’gosh, Jockey, Bose, Coach, Vitamin World, and Bath & Body Works.

Still, surveyed shoppers had a few gripes. For example, 8 percent said they found a poor selection of styles, sizes, or colors, and 6 percent complained that the quality of the merchandise was lower than they expected.

And you might be surprised to learn that not all stores at outlet malls are actually outlets. That was our reaction when a clerk at a Harry & David store told us that although its 48 locations are mainly in outlet malls, those shops are actually retail stores. By the industry’s definition, an outlet center is a shopping center in which most of the individual tenants are owner-operated outlets.

During the leasing agreement process, developers usually require tenants to maintain a certain percentage of merchandise that is sold at a discount compared with retail-store prices. Indeed, the nine items we purchased at the Harry & David store were discounted, though only by 10 percent.

Today you’ll find fewer “seconds” at outlets than a few years back, and more goods made just for the outlets. Because most goods are now manufactured overseas, damaged items are weeded out before they’re shipped to the U.S. In addition, retailers have become better at forecasting demand, which has led to fewer production overruns, says Karen Fluharty, a partner at Strategy & Style Marketing Group, a retail consulting firm.

Made-for-the-outlet goods are usually tweaked so that they can be offered at a lower price. In general, we’ve found full-price versions were a bit better because of details or materials that could bolster comfort, appearance, or longevity. But in most cases, the outlet versions were fine. A bag we bought at a Coach outlet, for example, lacked a retail version’s embossed leather, more comfortable handle, and curved zipper that allowed it to open wide for easy access. Yet our textile expert found that both bags were well-made. “Retailers may change the product slightly to reduce their cost so they can sell it for less, but they still stay true to their brand quality,” Humphers says.

At Bose, we found many returned products that the company had refurbished. Some of the food at a Harry & David’s store differed from its website offerings, including the fact that the store had no fruit in stock. But for some housewares and children’s goods, we found identical items at retail stores: a girl’s outfit, a boy’s backpack, a dinnerware set, pots and pans, and a casserole dish.

Are the discounts true markdowns?

Most of our readers were happy with outlet deals. Sixty-four percent of store visits yielded a great value, and at 34 percent of stores prices were much lower than sale prices at regular stores. Readers’ picks for superior value: Bon Worth, L.L.Bean, Haggar, OshKosh B’gosh, and Izod.

Most of the goods we purchased were 3 to 72 percent less expensive at the outlets than similar items we bought at retail. But about 17 percent of readers said prices were higher than they expected, the top complaint we received about outlet shopping. And three items we purchased—a girl’s outfit at OshKosh, and a dinnerware set and pots and pans from Kitchen Collection—cost 6 to 29 percent less at regular stores. The boys’ backpacks we picked up at Old Navy were the same price at the retail and outlet store.

As for selection at outlets, 38 percent in our survey said it was as good as at regular stores, and 25 percent said there was a wider selection of goods. When we shopped at CorningWare Corelle, which got very good marks for selection, we found many more dish and dinnerware options than the handful available in stores that carry those brands, including Sears, Target, and Walmart.

Service received similarly good scores, with just 14 percent of respondents calling outlet service fair, poor, or very poor, down from 20 percent in 2010. And there may be more amenities to look forward to because many outlets are expanding their centers’ offerings to entice families to linger. In addition to the holiday celebrations, look for new upscale restaurantsand food trucks, movie theaters, and art and music festivals.

Were these outlet items worth the trip?

We bought 32 items at 20 stores in the New York metro region. Then we compared prices and had our purchases inspected by our lab experts. 

5 outlet items that were worth it

Product

Retail price

Outlet price

What we found

Coach Hobo pocketbook

$378

$149.50

Retail: Fine finishes, better construction, more comfortable handle, and embossed logo.

Outlet: Good bag with less fine detailing and flat handle; saved us $228.50.

Brooks Brothers men’s leather belt

$98

$74

Retail: Fine-grade leather with backing, polished brass buckle.

Outlet: One piece of leather; satin brass buckle.

Bose noise-canceling headphones

$300

$269.95

Retail: Very good sound quality and excellent noise reduction.

Outlet: Headphone factory-renewed; in our labs, performance was identical to the retail version’s.

L.L.Bean sheet set

$123

$69.99

Retail: Pima percale, 280-thread-count cotton sheets.

Outlet: Exact same thread count and fiber content as the retail version, but probably last year’s pattern.

J.Crew ballet flats

$150

$41.70

Retail: Fine leather, made in Italy, wooden heel, extra insole support.

Outlet: Made in China, less support, but similar looking and 73 percent cheaper.

5 outlet items that weren't worth it

Product

Retail price

Outlet price

What we found

OshKosh B’gosh girl’s top and pants

$28

 

$39.20

Retail: Neater sewing job.

Outlet: More expensive, and a pleat was mistakenly sewn into the neckline; loose threads on bow, ruffle, and pants.

 

L.L.Bean rolling duffle bag

$99.95

 

$94.50

Retail: A different style and material from the outlet version’s; larger and only slightly more expensive.

Outlet: Clearly marked “returned”; the wheels showed wear.

 

Corelle dinnerware set

$74.99

 

 $79.99

 

Retail: A 16-piece Hanami pattern set, with plates, bowls, and mugs.

Outlet: Identical Hanami pattern set for $5 more.

 

Revere Ware pots and pans

$67.99

 

$69.99

 

Retail: Copper-bottom lined seven-piece stainless steel set.

Outlet: Identical set, but cost us $2 more (and more drive time).

 

Hamilton Beach 12-cup coffeemaker

$25

 

$29.99

 

Retail: Its carafe was especially easy to use, hold, pour from, and empty.

Outlet: Received a lower overall score than the retail model in our tests and costs more.

 

8 ways to save time and money

Apps such as PriceGrabber can help you find better deals than at the outlet mall.

Compare prices first. Just becausean item’s at an outlet doesn’t mean it’s a bargain. Do a price check via smart phone or computer before you buy.

Time it right. Price slashing generally takes place on holidays and during traditional retail sales periods, including Black Friday. If you can, plan your trip for Tuesday through Thursday, when there are fewer shoppers. And shop early in the day, when merchandise hasn’t been picked over.

Plan your trip. To avoid wasting time and missing bargains, log on to your local outlet center’s website and download a map before shopping. The typical outlet mall today covers more than 400,000 square feet and has 100 or more stores.

Get the coupon book. While you’re on the website, look for printable coupons. Some centers charge a fee fora book of coupons on-site, but you can generally download it free by signing up for the rewards program. Or go to customer service to get a hard copy.

Check out rewards programs. You can get exclusive, personalized coupons and sale offers. At the website for Tanger, which operates 40 malls nationwide, a one-time $10 fee earns you free gift cards once you hit certain spending levels, free coupon books that you can access on your mobile device, exclusive Web offers, and more. At Simon, which has 68 outlet malls across the U.S., if you sign up for the free VIP Shopper Club you get a free coupon book, sales alerts, and exclusive coupons.

Use apps. PriceGrabber and Red­Laser, for example, scan bar codes and search for better deals online and in nearby stores. And see whether the outlet mall has its own app. Tanger’s, for example, displays exclusive offers that pop up when you’re nearby.

Seek other discounts. Ask about any additional perks for AARP members, college students, or military members. On Tuesdays at Simon outlet malls, shoppers 50 and older get 10 percent off at participating stores.

Know the return policy. Most regular retailers won’t take returns from outlets. And most outlets don’t have an online presence, although J.Crew Factory and Saks Off Fifth do; outlet stores might not take returns from their websites.

Editor's Note:

This article also appeared in the December 2014 issue of Consumer Reports magazine



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