The concept of outlet shopping was born in the United States when clothing factories began selling their damaged or surplus stock to employees at heavily discounted prices. Brands realised there was a wider market and vast outlet shopping malls sprung up selling to the public.
The idea has proved popular in Britain and a number of outlet shopping centres have opened including Bicester Village in Oxfordshire, the London Designer Outlet and the chain of McArthurGlen Designer Outlet centres. They sell luxury and high street brands such as Armani, Bose, Dior, Mulberry, Superdry and Reiss at an advertised discount of up to 70pc.
But online shopping is where the real future potential lies for both retailers and shoppers.
Retail giants such as M&S, John Lewis, House of Fraser and Tesco are getting in on the action with online outlets, but are they genuinely selling recent stock at heavily discounted prices or are you paying for lower quality?
Many brands are using the auction website eBay to sell their surplus goods. Tesco, House of Fraser, French Connection and Savile Row Company all have eBay outlet stores. Some let you bid on items in the traditional eBay style while others only allow you to purchase goods at a fixed price. Items range from factory seconds or one-off samples that never made it into stores, to recent stock that did not sell in end-of-season sales.
Tesco uses its eBay outlet store to sell discontinued stock and refurbished items that were returned by customers. The supermarket said all customer returns are inspected, repaired if necessary and reboxed, and all items are sold with a 12-month Tesco Outlet Warranty.
The refurbished items appear to offer much better value than the new products. A new Delonghi 10-cup filter coffee maker in its original packaging was this week listed for £20. An online search showed the same model is available elsewhere for a retail price of £22.99. However, a refurbished Fujifilm FinePix J100 digital camera sold through auction for £22 on Wednesday. The same camera is available new on Amazon for £129.95.
M&S, which has 50 outlet stores around the UK, launched its own outlet website in February 2012. It has over one million visitors to the site every month, compared to 15.6 million to the main M & S website.
A spokesman said the vast majority of items were recent-season M&S clothing and homewear with up to 50pc off. M&S does sell cheaper-quality products through its outlet, however some basic items such as plain T-shirts, socks and tights are offered only as outlet stock.
For example, a men’s pure cotton plain white crewneck T-shirt on the main M&S website costs £7.50, while the same product costs £5 on the outlet site.
When pushed on whether the two items were the same quality, the spokesman admitted the more expensive T-shirt was made to a higher quality because the fabric is fade-resistant and resists bobbling.
The fashion brands Reiss, Hobbs, Hackett and Monsoon have all launched online outlet sites to sell their goods, either as a stand-alone site or as a separate section on their main website. They claim to offer discounts on recent stock of up to 70pc.
A trawl of these sites showed the clothes on offer are usually recent-season stock at genuinely discounted prices, but the sizing options tend to be patchy, particularly for popular sizes.
Many shoppers are wary of buying online, particularly from outlet stores, in case the quality isn’t up to standard or the savings aren’t genuine. This was highlighted in December when Dispatches on Channel 4, presented by The Daily Telegraph’s Harry Wallop, accused the discount chain TK Maxx of misleading shoppers by inflating the original retail price of its goods to make consumers believe they were making a bigger saving than they actually were.
It cited the example of a Rohmir coat that TK Maxx claimed had a recommended retail price of £2,225, but which the designer confirmed was originally £800. TK Maxx countered that the RRPs were set after conferring with the seller, and added: “[We] only cite an RRP which has been provided … independently by the third party seller.”
Dispatches also claimed that some products were made specifically for discount outlets and were of different quality.