Charity shops in the UK seem to have beaten the economic slowdown as shoppers look for value away from the traditional High Street chains.
The profits of the top charity shops rose 7.4% to a total of £106.7m over the past year, according to the Charity Shops Survey 2008. Top of the charity money earners was Oxfam, with profits of more than £21m. The biggest growth came from the Salvation Army, which saw its profits surge 64%. The increases in charity shop profits contrast with falls across the rest of the retail sector as the credit crunch has started to bite. Recent figures from the British Retail Consortium show that retail sales values were down almost 1% from July 2008. Since the credit crunch started, clothing chain Ethel Austin and the shoe retailer Dolcis have gone into administration as shoppers have cut back on spending.
Defying the downturn
But while mainstream retailers have been struggling, some charity outlets have been preparing themselves for an increase in business. David Moir from the Association of Charity Shops said that his members were well placed to buck the economic downturn. "Trading conditions, as for all retailing, are now extremely tough," he said. "However, evidence from previous slowdowns is that charity shops are well placed to weather economic storms as cash-strapped consumers turn to them for value for money." "If charity shops continue to respond to consumer needs, then they are well-placed to come out of this downturn in a good position." he added.
The British Red Cross said in July that it is going to spend £12m over the next five years to improve its charity shops. It plans to open 20 new shops each year until 2012 and refit 140 existing shops.