Do charity shops need to change to survive on the modern high street?

A bastion of cheap clothing, bric-a-brac and old novelty records, the Great British charity shop is one of the more reliable sights on any local shopping parade, from Cardiff to Carlisle. Responsible for raising an estimated £290 million for their respective charities every year, these stores have been high street fixtures since the tail end of the 19th century.

Yet last year, a report conducted by the True And Fair Foundation (TFF)—founded by Gina and Alan Miller—showed that around 40% of the nation’s charity shops are turning a profit below 17p to the pound. The report, entitled “Lifting the Lid”, claims that many charities spent under a tenth of their income on directly charitable causes, one of many statements which have been roundly criticised by third sector commentators for being “deliberately misleading.”

But what has brought on this criticism? Does the sector need to adapt in order to keep up with current retail trends, or is that the whole charm of charity shops to begin with?

Local councils (and local stores) aren’t quite so keen…

The TFF report was not specifically targeting charity shops, but the third sector as a whole. Its main recommendations around charity retail were effecting considerable changes to “the efficiency, role and positioning” of stores on the high street. The report’s reasoning behind this is in order to “reduce the unfair playing field for other high street operators”—that is to say, major (and independent) commercial retailers.

Part of the reason charity shops have managed to survive, despite a decrease in foot traffic, is the 80% relief in their rates provided to them by the government; this makes charity shops one of a select group of buildings to receive this dispensation. This is one specific area targeted by the TFF report, which suggests a 10% annual reduction of these rates, leaving the overall relief at 50% by the end of the decade.

Many local councils, such as that of Medway, are already reducing these relief efforts, with exceptions for specific types of charity, such as those who work with children and the elderly. While this may save councils two thirds of their charity annual relief budget, but the overall £1.56bn of savings are going to be near-impossible for the sector to pay by themselves.

If this relief effort is removed across the board for charity shops, the death of the charity shop is unfortunately assured. So how can charities continue to raise money through retail?

…but the British public will always love a bargain

As inflammatory as the TFF’s report is, it seems to fly against the public’s perception of charity shops on the whole. One survey found that charity shops were more likely to be where people sourced all of their second hand goods in comparison with the likes of eBay. This would explain the growth of chains like Cancer Research UK, who are branching out into launching “superstores”, boosting their profits through selling furniture in larger spaces.

This growth does have its downside, one rooted in the darker days of the recession a decade ago. Finding expensive clothes at bargain prices during the economic downturn led to a severe case of supply and demand; consequently, more upscale, rare and vintage items have started to be sold at closer to their market value.

Oxfam’s press spokesperson has been quoted as saying “We need to respect the donation; if we get a Chanel bag, for example, we are not going to price it at £300 but we are not going to price it at 99p either.” This fair pricing may be logical, but it does go somewhat against the public perception of charity shops, where you’re as likely to find a book once owned by Radiohead’s Thom Yorke as you are fifty copies of Fifty Shades.

Charity begins…online?

Perhaps the charity retail sector has already started preparing for a post-high street life. This September will mark the tenth anniversary of Oxfam becoming the first charity shop to begin operating online. Critics saw this as a removal of the “rummaging [and] wandering” which makes the charity shopping experience so widely-loved to begin with, but as with online stores in general, charity e-commerce sites are becoming increasingly widespread.

By 2014, 80% of charity shop branches were selling their wares online, predominantly via eBay; the online auction platform began integrating charity into its site in 2003, first under the guise of eBay Giving Works, then as eBay For Charity, and this integration seems to have worked. Last Christmas saw Oxfam’s online sales increase by 43%, while charities are also taking advantage of online sales trends such as Black Friday, in a bid to improve their online takings, as well as in-store.

The rebate on charity shop business rates is not up for revaluation for a few years, particularly after the recent delays. However, if charity shops do end up being hit hard, it’s encouraging to know their fallback option of online retail is becoming a more sustainable solution.