The Charity Shops Survey 2024 has found that a number of UK charity shops have seen their profits drop as they continue to face higher expenditure levels.
Published in the October issue of Civil Society’s sister publication Charity Finance, the annual survey received responses from 34 charities providing details for the financial year to 31 December 2023 or March 2024.
When looking at the 28 organisations that completed both the 2023 and 2024 surveys, profits fell by 16% to £104m during the period under review.
Meanwhile, expenditure at these shops increased by 13% to £533m.
Mixed picture
Respondents recorded a total income of £638m, compared with £598m the previous year, and expenditure of £533m, up from £474m.
The survey finds that the current economic climate has affected charity retailers differently.
St Margaret’s Hospice Care described the trading environment as “favourable” as it enjoyed its third successive year of growth and record sales.
“Customers are choosing to shop locally in sustainable and budget-friendly stores and they have remained loyal during this period,” it said.
“Last year, we had 57,000 more customer transactions, an increase of 8% on the previous year.”
Similarly, East Anglia’s Children’s Hospices (EACH), whose retail income grew by 14% to £8.26m, said 2023-24 was another strong year for its shops.
It saw “excellent” like-for-like growth driven by small inflation in its retail prices and more customers turning to secondhand goods due to the cost-of-living crisis.
However, EACH said: “This growth slowed in the last few months of the year and as we enter 2024-25, we’re looking at a much more challenging situation where inflationary growth in expenditure, most notably the significant increase in salaries from 1 April, is outstripping income growth.
“Hence, we expect this to result in a lower surplus in 2024-25.”
For Age UK, 2023-24 was a year of two halves, “with retail shops producing record performances in the first half of the year before facing a more challenging second half”.
Likewise, the British Heart Foundation agreed that the second half of the year saw consumers in the charity sector and elsewhere tighten their belts, adding that this was “exacerbated by exceptionally poor weather”.
Salary and staff pressures
The survey also shows that staff costs increased by 12% to £240m for the 28 respondents and now represent a higher proportion of their income.
In line with last year’s survey, respondents cited ongoing recruitment and retention issues, with many struggling to attract the right calibre of employees due to salaries and higher demands from applicants.
Bolton Hospice and the Children’s Society both said a lack of adequate cover and fewer applicants for roles had resulted in revenue losses.
Meanwhile, Cancer Research UK (CRUK) reported a “high vacancy rate” in its retail operation, which the charity is currently tracking at 7%.
“Time to hire has been impacted by long-term vacancies, with the average being currently 42 days,” CRUK said.
“The talent team has reviewed internal processes, all adverts have been refreshed with new branding and we’ve improved our induction programme specifically for shop managers to drive better retention.”
The Charity Shops Survey 2024 can be purchased here.
Charity Finance Week returns for 2024 (7-11 October), with a dedicated week of face-to-face and virtual events, content, and thought leadership initiatives. Find more here.
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