Charities are increasingly deciding to open larger shops away from town centres to boost profits and expand their range of products, experts have said.
Yesterday at the Charity Property Conference 2017, hosted by Civil Society Media, speakers discussed how the average size of charity shops had steadily increased over the past ten years.
Robin Osterley, chief executive of the Charity Retail Association, said this “shift upwards” had been driven by “a growth in specialisation”.
He said: “The reason that the average size of a charity shop is getting bigger is that more and more of our members are adding furniture and electrical stores, which have to be larger. Quite rightly more and more of them are moving out of town.”
Osterley said he had recently visited Cancer Research UK’s largest charity shop, which opened in Stevenage in March, and described it as “absolutely mind boggling”.
Roy Clark, director of retail and trading at Barnardo’s, said he agreed “broadly” with Osterley but said another reason to open larger stores was increasing pressures on charity shops’ profits.
Clark, who moved from the private sector last year, said rising labour costs meant charities needed to focus more on whether their stores were profitable.
He said: “I don’t think charity retailers have focused enough on return on investment, looking at the percentage of profit that is being made.
“The headwind we face into is around labour costs. Barnardo’s in March 2016 decided to award its colleagues the Living Wage Forum national living wage. So quite significantly above minimum wage. But we know where the minimum wage is going and it could be at £10 in 2020.
“I think we need to forensically look at where that cost base is and decide how better we can get a return and certainly part of that is about larger stores.”
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Earlier in the discussion, the panel talked about the additional benefits to the community offered by charity shops including the sector being the largest provider of volunteers in the country.
They also discussed tensions that can rise between some charity shops and other local independent stores partly because they are not paying full business rates.
Osterley described the disagreements as “unhealthy” and argued that charity shops helped increase footfall for surrounding stores, but said managers of these stores were less able to ingratiate themselves with the local retail community.
He said: “Charity retailers don’t have the time to take part in local structures such as chamber of commerce.”