In the current economic environment, even good-cause retailers are struggling. Ahead of Rachel Reeves Budget, in the latest blow to the hight street, they warn of surging costs, mounting costs and poor quality donations
Once a bargain-hunting treasure, they were full of finds. But many charity shops are struggling for survival as costs rise and sales slump in a challenging economic climate.
As Chancellor Rachel Reeves prepares to deliver her autumn Budget today, retailers have warned that any further price hikes – following rises in employer National Insurance contributions, energy bills and rent – could trigger new closures.
Cancer Research UK recently announced its intention to shut down 200 stores, prompting the warning. Disability charity Scope is also shutting 56 stores across England and Wales, while Oxfam and Barnado’s have reported sluggish sales.
Separately, industry experts claim that sales are also impacted by a decline in the quality of donations.
Despite continuing strong trade since Easter, according to Robin Osterley, CEO of the Charity Retail Association, the sector has faced significant costs.
Because many of our members have been part-time staff members who have entered the national insurance system for the first time under the threshold, he explains, “it definitely hurts in terms of cost,” he says. “Profitability has taken a slight nosedive,” the statement reads.
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When charity shops are run by people who assume they are cheap, according to Tom Abbott, director of income generation at St Christopher’s Hospice.
Tom claims that these measures don’t fully cover the full cost of keeping stores open despite support from tax relief and the Gift Aid program, which allow charities to receive an extra 25p for every £1 donated.
“We still have to pay rent, utilities, insurance and employ trained staff to manage volunteers and comply with regulations”, he says.
“And operating costs can continue to be high due to the high costs of waste disposal.” Every penny raised in our St. Christopher’s stores requires a lot of work.
In South East London, the charity has more than 20 locations that sell clothing, toys, books, and home goods. It is changing the sales pattern. Last year, it generated income of £5.4million, with more customers coming through its doors than in the previous year. Tom attributes this to the vibrant local consumer base.
He goes on to say that the community connection is crucial. “We work really hard to be part of the communities that we’re in, whether it’s Streatham or our wider community. The locations of St. Christopher’s shops and national charities differ slightly, as your immediate connection to your neighborhood, your family, and your neighbors are less difficult to recreate.
However, they are having to rummage for longer than usual while shoppers keep looking for bargains. The quality of donations has definitely gone downhill over the past two years, “explains Emma Wiseman, 27, store manager at the homeless charity Crisis on Streatham High Road. She points to the rise in cheap clothing made for mass retailers in large numbers as one cause of fast fashion.
However, she continues, “Our attitudes have changed and we are now seen as a place to dispose of trash.” This is also being shared by other charity shop managers, which I am aware of. They get shoes that are broken and things that are very stained, which is more work for us.
“It would be wonderful if more people knew what we can and can’t sell. Although we appreciate all donations, it frustrates us when 80% of what you receive on that day is pure garbage.
It’s the same story across the country. Around half of all her shop donations, according to Stefanie Curran of Punk Against Poverty, a community interest organization in Torquay, Devon, claim to be unreachable. The fully volunteer-run shop now earns just £6 per week, up from £150 per week from textile recycling organizations.
“We get a huge amount of dirty or damaged donations”, explains Stefanie. Because it’s dirty, ripped, stained, or painted on, about half of what comes in is unusable. The standard of quality has drastically decreased. Only around 15% of what we receive makes us go, ‘ Oh wow, that’s brilliant'”.
The store now pays to get rid of numerous items that were previously paid for. When it opened in 2020, unsellable donations were sent to textile recyclers for a decent return. However, Stefanie claims that there are significant issues with the rag trade. Textile waste is being handled on international markets, where sorting is more expensive and difficult.
“Our shop is tiny and we only sell clothing, books and a few toys, but we still get household goods dumped on our doorstep”, Stefanie grimaces. “The bags frequently have been rained on or used as dog toilets.” Nobody will help sort through that.
There may be one unexpected saviour in the wings – Vinted. The online resale platform, along with DePop and eBay, has eaten into charity shop sales in recent years as people sell their best second-hand items for a profit. But Punk Against Poverty now, paradoxically, relies heavily on the items it sells through eBay and Vinted. “If we didn’t have them, the shop wouldn’t be open anymore,” says Stefanie. One of her biggest concerns right now is shoplifting. “We have a massive issue with people stealing items and swapping labels,” she says. “Charity shops don’t have the same security as other stores, and people take advantage of that.”
In light of the ongoing cost-of-living crisis, shoplifting has reached record highs in England and Wales this year. Some 530, 643 such offences were reported in the year to March, a 20% rise from the previous year.
At her Crisis store, Emma Wiseman first-hand witnessed it. People don’t necessarily notice what’s attached, she says because they just see it as a store. “But stealing from a homelessness charity is like the next level”.
Streatham High Road in South London might be the place to be if there is a reason to cheer. Along one side of the nearly two-mile-long road, there are 11 charity locations, including FARA, Shelter, and the British Heart Foundation. Emma says these shops aren’t just retail spaces, they’re social spaces and community hubs for everyone. Many stores offer customers regular entertainment and live music events.
The high street could serve as a model for others, according to her colleague, Aurora McLaughlin-Hacker, store manager at the Streatham Crisis store.
“Streatham’s a very interesting place because charity shops do really well, partially because it’s a very low-income area”, she says. So charity stores fill a need that conventional retail outlets cannot. There is a lot of do-it-yourself culture in Streatham as a person who was born and raised, with little to no buying or selling. She continues: “There’s a Streatham charity shop circuit that a lot of young people do as a daily activity – you can start off at Streatham Hill and go all the way down. I am aware that as a teenager, we would do the charity shop circuit down here rather than going to Wandsworth or Croydon or whatever.
Meerab Shamoon, 25, store manager at the British Heart Foundation in Streatham, agrees. She applauds the strong community spirit that keeps the high street thriving, breaking the national trend of store closures, and believes that local charity stores operate more like neighbors than rivals.
She says, “The shops are very collaborative, we help each other with stuff; it’s very open, we share, we support each other,” adding, “it’s very collaborative.” “People shop locally, and you want to have a relationship with your customer. Many regular customers have become volunteers, thanks to us. I started out as a volunteer and now manage. I’ve covered 13 shops in South London and Streatham is the only place I’ve seen this much collaboration and communication. This place is incredibly welcoming.
Stefanie Curran urges people to do everything in their power to stop the pain, even though it will take time to come through and retailers are prepared for the challenges that lie ahead.
First and foremost, think before dropping off any donation.
“Having to go through complete garbage or plastic bottles that ought to be in the bin and having to wear gloves to sort through it is disheartening,” she says.
“Please remember to wash items first and check what the shop actually needs before making your donation”. We can all do it at the very least.
READ MORE: Millions of workers in line for pay rise as minimum wage hike confirmed
Source: Mirror
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