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The voice of Scotland’s vibrant voluntary sector

Published by Scottish Council for Voluntary Organisations

TFN is published by the Scottish Council for Voluntary Organisations, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh, EH3 6BB. The Scottish Council for Voluntary Organisations (SCVO) is a Scottish Charitable Incorporated Organisation. Registration number SC003558.

Charity shop growth stalls as profits take a hit

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​Survey indicates the massive growth in high street charity shops is slowing

The previously unrelenting growth of charity shops is showing signs of slowing, according to data from the Charity Shops Survey 2014.

While the survey shows the sector is still growing, growth in new shops is the lowest since 2008 while profit is the lowest since 2006.

The report shows the number of shops was up 1.7%, while profit gained 3.2% and income increased 7.8% on last year.

But this rate of growth is the lowest since before the recession, giving concern the charity retail sector may be reaching critical mass.

Charities are reporting concerns about acquiring good quality stock, and say they expect more competition for space on the high street

The report canvassed 73 charities who operate a total of 6,505 shops in the UK with a combined income of £807.2m and returning a £189.6m profit.

David Ainsworth, author of the report, said: "This survey shows that after strong growth all the way through the recession, the charity shops sector is beginning to find things tougher.

"Charities are reporting concerns about acquiring good quality stock, and say they expect more competition for space on the high street.

"The drop in the rag price (used clothes) suggests that next year we might see profit growth slow even more.

"On the plus side, we see significant growth in online trading and charities diversifying their offer with more specialist shops."

The largest charity in the retail sector remains the British Heart Foundation with a turnover of £171m.

Warren Alexander, chief executive of Charity Retail Association said despite the slowing of growth the figures were still encouraging.

"I am not too concerned about the shop openings number," he said. "We hear from our members that this is due to them changing focus on improving existing shops rather than looking to open up new ones.”

Sense Scotland: responding to the challenge

Charity shop growth stalls as profits take a hit

Mairi Morrison, Sense Scotland's head of business development comments:

Sense Scotland has invested in its charity shops in recent years, recognising the importance they play in raising awareness of our work as well as raising much needed funds.

Since 2010 we have increased our shops from 10 to 23. This includes new shops in Broughty Ferry, Dundee and Perth, a book shop in Peebles, as well as temporary rent free shops, the newest of which will open soon in Montrose.

Last year’s growth was 0.8% so yes, charitable trading and obtaining good stock is challenging but we have responded by investing in new branded shop vans which not only increase our capacity to keep our shops well stocked, but raise awareness of Sense Scotland.

Due to the growth of our shops in the east of Scotland we have recently appointed a new stock collector.

Retail trading continues to be an important source of revenue. Furniture sales are increasing, 41% in the last quarter and the introduction of 99p shops mean we maximise income from clothing which would previously have been recycled and the retail Gift Aid scheme increases the value of sales by 25%.