Charity shops continue to suffer the effects of the recession

 

If you were to walk down your local high street it would most likely be awash with charity shops. But look a little closer and there is a good chance of the windows of those shops being emblazoned with notices such as “donations needed”.

The global economic crisis had a profound impact on charity shops. Terry Mutton, the Retail Operations Manager at Age UK, said: “It has been very difficult over the last four or five years as a result of the recession. The reality is that the majority of people who donate are actually those who have lost their jobs, but the actual quantity of items remains the same.”

Effect of eBay

The days when charity shops had a near monopoly on the second-hand market are long gone, with the popularity of trading site eBay having had a considerable impact on the amount of items donated to charity shops.

Mr Mutton said: “eBay has been around a long time now so we’ve really taken the hit of that but people now have a much better perception of what the value of something is and may be more reluctant to donate it if they feel they can get money for it elsewhere.”

He admitted: “We also use eBay ourselves sometimes if we feel we can get more value for an item.”

From their emergence in the Second World War, charity shops in the United Kingdom have grown considerably, with Oxfam alone now having over 700 stores.

“Increasingly difficult challenge”

Mr Mutton admits that it is becoming an increasingly difficult challenge to generate sufficient stock. He said: “The rag price is continuing to tumble, and, to give you an indication, we need to get 80,000 bags a week. 50 per cent of those are over the door and 50 per cent we have to stock collect. It’s becoming a real struggle to get that other 50 per cent.”

Some charity shops in other areas of the country, however, have not been as hard hit. Sue Goodchild, Head of Retail at St Elizabeth Hospice, says that her charity has continued to thrive despite the economic downturn.

She said: “St Elizabeth Hospice has 26 shops in Suffolk and Norfolk and we have not struggled for donations as a consequence of the economic crisis. We have a wide local supporter base with a strong connection to the Hospice so we are consistently well-supported.

“In fact, when money is tight, some people will find it easier to give back to charity by donating unwanted items rather than making a monetary donation.”

“Ageing population”

Despite Britain’s ageing population, an unexpectedly high number of young people are now donating items to charity shops on a regular basis. Mr Mutton states that, especially in university towns, an increasing number of people under 25 have donated to his shops.

Ms Goodchild has noticed a similar trend. She said: “I think they are donating if they are students. At the end of term they will donate their items rather than shipping them home.

“However it all depends on the location of the shop and if it is convenient for them to drop off there. We have many younger people’s style clothing for sale and the number of younger volunteers in our shops is growing.”

The benefits of charity shops are plentiful as they provide cheap goods and employment opportunities for the local community, whilst enabling the charity in question to generate sufficient funds.

Quite how significant they will be in the future is open to some debate, though, with Mr Mutton expressing concern about the country’s ageing population. He said: “There’s certainly an ageing population in the UK. There are 4 million older people in the UK and this will increase to 6 million by 2030.

“It’s all about the future figure, but by then we may well have an awful problem given that the care system can hardly cope now. There’s a big concern about what will happen.”

Diminishing stock

In some aspects the situation concerning charity shops can be deemed to be quite positive, with research by the Charity Retail Association indicating a growth of three per cent in the number of charity shops in the United Kingdom since 2008.

However, despite the increased number of shops, stock supply has diminished considerably. The Charity Retail Association found that one in six people surveyed in 2012 admitted that they have started selling their unwanted clothes in order to make a profit instead of donating them.

A further concern is that some individuals purchase items in charity shops with the intention of selling them online for a higher price, which distorts the market somewhat.

Jenni Heavingham, Head of Charity Shops at the Octavia Foundation, said: “One of the downsides is the amount of different charity shops opening in close proximity to each other – this dilutes the donations available to sell and customers have a finite amount to spend.”

She continued: “Customers come in to find bargains and we also provide a community hub for some locals. Gift Aid has been a good HMRC tax initiative introduced over the past few years.

“Some customers do come in to find under priced goods to re-sell on line, hopefully our staff are well versed and trained in the value of goods so we are not underselling our donations.”

Concerns have been raised

There is greater scope to charity shops than meets the eye, with some charities offering rather different goods to those available in most stores.

The British Heart Foundation Furniture and Electrical Store located in South West London, for instance, is perfect for purchasing sofas and other items at discounted prices, whilst the Cancer Research UK shop on Marylebone High Street frequently sells much sought-after vintage items.

Historically, the importance of charity shops in British society has been profound, particularly for those families that are struggling financially.

However, concerns have been raised in recent times about the ability of smaller charity shops to deal with competition from other retailers, particularly when they are located near large shopping centres.

Lasting effects of the recession

Even the more established charities are struggling to come to terms with the effects of the economic downturn, with Oxfam seeing its income fall by a staggering £17.6 million to £367.9 million in the financial year ending March 31st 2013.

Bob Humpheys, the charity’s finance director, remarked that people are buying fewer new clothes, which has had a major impact on charity shops.

Similarly, the British Red Cross, one of the United Kingdom’s most renowned charities, reported a £14 million decline in income between 2011 and 2012. The charity cited a lack of international emergencies as the primary reason for the falling figures and is one of several organisations that have struggled for donations in recent times.

Another prominent charity, Christian Aid, saw its income remain almost the same in 2013 as it was in 2012, but this news was offset by a steep decline in donations, which fell by seven per cent in the same timeframe.

The success of St Elizabeth Hospice demonstrates that the situation isn’t completely bleak regarding charity shops, but for many charities, both large and small, it may be some time yet before they are fully over the lasting effects of the recession.

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