Experts issue stark warning to shoppers as high street favourites struggle to survive

They were once a treasure trove of finds for bargain hunters. But many charity shops are struggling for survival as costs rise and sales slump in a challenging economic climate.

As Chancellor Rachel Reeves prepares to deliver her autumn Budget today, retailers have warned that any further price hikes – following rises in employer National Insurance contributions, energy bills and rent – could trigger new closures.

The warning comes after Cancer Research UK recently announced its plans to close 200 shops. Disability charity Scope is also shutting 56 stores across England and Wales, while Oxfam and Barnado’s have reported sluggish sales.

Separately, industry experts say a deterioration in the quality of donations is also harming sales, more of which to follow.

Robin Osterley, chief executive of the Charity Retail Association, says the sector has faced substantial costs despite trade being strong since Easter.

“It’s mainly the increase in the National Insurance threshold for employers because a lot of our members have been part-time staff who have been involved in the National Insurance system for the first time through the threshold, and it certainly hurts in terms of cost,” he explains. “Profitability has taken a bit of a nose-dive.”

Tom Abbott, director of income generation at St Christopher’s Hospice, says people assume charity shops are cheap to run when, in fact, they have many of the same costs as other retailers.

Despite help from tax relief and the Gift Aid scheme – which lets charities claim an extra 25p for every £1 donated – Tom says these measures don’t cover the full cost of keeping shops open.

“We still have to pay rent, utilities, insurance and employ trained staff to manage volunteers and comply with regulations,” he says.

“And waste disposal costs mean that operating costs can remain high. Every pound we raise in our St Christopher’s shops takes real effort.”

The charity has more than 20 shops across South East London, selling clothing, toys, books and homeware. It is bucking the trend when it comes to sales. Last year, it generated income of £5.4million, with more customers coming through its doors than in the previous year. Tom attributes this to the strong community of local shoppers.

“That community connection is really important,” he continues. “We work really hard to be part of the communities that we’re in, whether it’s Streatham or our wider community. St Christopher’s shops are positioned slightly differently to a national charity where that immediate connection to your community, family and neighbours is harder to recreate.”

But while shoppers continue to hunt for bargains, they’re having to rummage for longer than before. The quality of donations has definitely gone downhill over the past two years,” explains Emma Wiseman, 27, store manager at the homeless charity Crisis on Streatham High Road. She cites fast fashion – the proliferation of cheap quality clothing made for mass retailers in industrial volumes – as one factor.

“But attitudes have shifted and we’re now seen as a place to get rid of rubbish,” she adds. “I know of this through other charity shop managers too. They get shoes that are broken and things that are very stained, which is more work for us.

“It’d be great if there was more awareness about what we can and can’t sell. We’re appreciative of all donations, but when 80% of what you get that day is literal rubbish, it’s frustrating.”

It’s the same story across the country. Stefanie Curran from Punk Against Poverty, a community interest company in Torquay, Devon, that tackles poverty and social issues through grassroots schemes, says around half of all her shop donations are unsaleable. Instead of earning £150 a week from textile recycling companies, the fully volunteer-run shop now makes just £6 a week.

“We get a huge amount of dirty or damaged donations,” explains Stefanie. “About half of what comes in is unsaleable because it’s dirty, ripped, stained or paint-splattered. The quality has massively dropped. Only around 15% of what we receive makes us go, ‘Oh wow, that’s brilliant’.”

The shop now pays to dispose of many items for which they once received money. When it opened in 2020, unsellable donations were sent to textile recyclers for a decent return. But Stefanie says the rag trade faces major problems. Overseas markets are struggling to cope with textile waste and sorting it is harder and more expensive.

“Our shop is tiny and we only sell clothing, books and a few toys, but we still get household goods dumped on our doorstep,” Stefanie grimaces. “Often the bags have been rained on or used as a dog’s toilet. Nobody volunteers to sort through that.”

There may be one unexpected saviour in the wings – Vinted. The online resale platform, along with DePop and eBay, has eaten into charity shop sales in recent years as people sell their best second-hand items for a profit. But Punk Against Poverty now, paradoxically, relies heavily on the items it sells through eBay and Vinted. “If we didn’t have them, the shop wouldn’t be open anymore,” says Stefanie. One of her biggest concerns right now is shoplifting. “We have a massive issue with people stealing items and swapping labels,” she says. “Charity shops don’t have the same security as other stores, and people take advantage of that.”

Shoplifting has hit record highs this year in England and Wales amid the continuing cost-of-living crisis. Some 530,643 such offences were reported in the year to March, a 20% rise from the previous year.

Emma Wiseman has seen it first hand at her Crisis store.“People just see it as a shop; they don’t necessarily see what’s attached,” she says. “But stealing from a homelessness charity is like the next level.”

If there is cause for cheer, then Streatham High Road in South London might be it. There are 11 charity shops along one stretch of the nearly two-mile-long road, including FARA, Shelter and the British Heart Foundation. Emma says these shops aren’t just retail spaces, they’re social spaces and community hubs for everyone. Many of the shops hold live music events and regular activities for customers.

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Her colleague, Aurora McLaughlin-Hacker, store supervisor at Streatham Crisis store, thinks the high street could even be a blueprint for others across the country.

“Streatham’s a very interesting place because charity shops do really well, partially because it’s a very low-income area,” she says. “So charity shops fill a gap that traditional retail shops wouldn’t be able to fill. As someone who was born and raised in Streatham, there’s very much a sort of do-it-yourself culture – instead of buying first-hand, you make do with what you have.” She continues: “There’s a Streatham charity shop circuit that a lot of young people do as a daily activity – you can start off at Streatham Hill and go all the way down. I know that when I was a teenager, instead of going into Wandsworth or Croydon or whatever to do shopping, we’d do the charity shop circuit down here.”

Meerab Shamoon, 25, store manager at the British Heart Foundation in Streatham, agrees. She believes the area’s charity shops work more like neighbours than competitors and praises the strong community spirit that keeps the high street thriving, bucking the national trend of closures.

“The shops are very collaborative, we help each other with stuff – it’s very open, we share, we support each other,” she says. “People shop locally, and you want to have a relationship with your customer. We’ve turned so many regular customers into volunteers. I was a volunteer myself, now I’m a manager. I’ve covered 13 shops in South London and Streatham is the only place I’ve seen this much collaboration and communication. It’s so welcoming here.”

While change will take time to trickle through and retailers are braced for further challenges ahead, Stefanie Curran urges people to do as much as they can now to help ease the pain.

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First and foremost, think before dropping off any donation.

“It’s disheartening having to go through complete rubbish or plastic bottles that should be in the bin and having to wear gloves to sort through it,” she says.

“Please remember to wash items first and check what the shop actually needs before making your donation.” It’s the very least we can all do.