Charity Retail Podcast Series: Episode 1 - Navigating today’s retail landscape

Speaker Sophie Michael provides an overview of the retail forecasts for 2022. Our host Fiona Condron, partner speaks to Robin Osterley, Chief Executive at the Charity Retail Association to get his view on what is happening in the Charity retail sector.

This podcast discusses the following topics:

  • Consumer confidence
  • BDO high street sales tracker
  • 2022 resilience
  • Business models and supply chains
  • Online trends and spending
  • Life after lockdown – cost of living, rising energy costs, supply chain issues
  • Charity superstores
  • Social media and e-commerce
  • BDO Charity Retail Sales Tracker

Speaker Sophie Michael, Partner

Sophie is the National Head of Retail and Wholesale at BDO LLP. She is an Audit Partner with over 25 years of experience of advising clients. She is passionate about the retail sector and has specialised in advising large private, private equity owned and listed clients from within the sector throughout her 25 year career. Outside client work, she is a member of the ICAEW Retail Sector Report Working Group, drives the weekly BDO High Street Sales Tracker which tracks LFL sales and leads the BDO Retail Forum.

Speaker Fiona Condron, Partner

Fiona is an Audit Partner in our Not-for-Profit group with over 25 years’ experience of delivering business assurance and advisory services to many leading charities, membership bodies and social enterprises in the UK.

Guest speaker Robin Osterley, Chief Executive, CRA



Robin Osterley is Chief Executive of the Charity Retail Association, the UK’s only trade organisation representing the interests of charity shops and their parent charities. He has extensive experience in membership associations, having previously spent 16 years as Chief Executive of Making Music, the UK’s leading association for amateur musical organisations, as well as a short time as Chief Executive of sports umbrella Supporters Direct. Alongside this management experience Robin has a longstanding background in lobbying and advocacy work, and he has been a representative on numerous Government and industry forums including the Music Business Forum and the board of ACEVO.


Summary

The charity retail sector has shown resilience over the last couple of years. Trading figures are currently positive and there is a great outlook for future. Quarterly market analysis provided by the Charity Retail Association (CRA) showing that for Q4 2021 there was 4.7% growth on 2019.

The sector is emerging strongly from pandemic, with two types of customers; – those who need to shop in charity shops for financial reasons, as their economic circumstances dictate, they want the best value for money. A second type who are wanting to find variety and going with the increasing trend towards sustainable shopping.

Cost pressures are heading in one direction, payroll costs are a major factor.  Many charity retailers try to offer cost of living pay increases to their staff, but with inflation rates between 3% and 5% this will be a considerable cost pressure for them.

Staffing pressures have been exacerbated by a shortage of volunteers, which charity shops then must plug with paid staff. Therefore, staffing costs will continue to be an issue for them over the next few months and possibly years.

The sector has maintained resilience in two ways. The first, focusing on what they are doing – raising money for good causes, meaning that staff and volunteers are able to handle situations in a more positive way. Second is that historically charity shops have always been good at innovation, although perhaps not in technology.  But in growth of superstores, seeing 13.7% growth in this area.

These superstores provide a space to showcase their charity’s activities and can be compared to a community centre – a shop window for what they are doing. Therefore, good at dealing with pressures to be able to keep themselves afloat.

Many commercial retailers have seen an acceleration in the online model over the past couple of years.  For the charity retail sector this is not a high priority for them. Online sales last year only accounted for 4.9% of their income.  A physical shop is seen as more important to their offering. The people side of the business is so important to their success.

Going forward the charity retail sector will face a number of challenges, cost pressures in particular staffing issues, shortage of volunteers, or the difficulty in recruiting staff as supply is not as great as demand. 

Charity retailers are good at doing new things eg the charity shop gift card launched recently via Marie Curie, which is already in hundreds of shops and is expected to be in several thousand shops next year.  In addition, there is potential and existing take up from local councils and other support agencies who are looking to buy gift cards instead of clothing vouchers for people – therefore giving those people a dignity of choice.

For further information about the Charity Retail Association please visit https://www.charityretail.org.uk/.

To register to receive BDO’s Charity Retail Sales Tracker, please visit here.

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