Sweets also found in outskirts of city (5)
I believe the answer is:
candy
'sweets' is the definition.
(thesaurus)
'also found in outskirts of city' is the wordplay.
'also' becomes 'and' (I've seen this before**).
'found in' is an insertion indicator.
'outskirts of' means to remove the middle letters.
'city' with its middle taken out is 'cy'.
'and' put within 'cy' is 'CANDY'.
(Other definitions for candy that I've seen before include "Girl's name (diminutive)" , "Crystallised sugar; US sweets" , "Sweet (US)" , "American sweets" , "American confectionary" .)