Charity retailers’ promising start to Q4 snuffed out by lockdown restrictions

17 February 2021

Despite an encouraging start, lockdown restrictions took their toll on the performance of charity retailers in the final quarter of 2020, with the outlook for 2021 remaining very uncertain, according to accountancy and business advisory firm BDO.

BDO’s Charity Retail Sales Tracker, produced in association with the Charity Retail Association, found that charity retailers had performed relatively well compared to commercial high street stores in October 2020. Total like-for-like sales were down by -19.2% during the month, versus a like-for-like decline of -27.7% in in-store commercial high street sales. However, as new lockdown restrictions were put in place towards the end of the month, charity shops felt an immediate impact on trade.

As so few charity retailers were able to operate in November, no data was collected for this month. However, as stores reopened in December, pre-Christmas sales provided an initial boost before stricter lockdown measures suppressed sales in the second half of the month. Total like-for-like sales were down by a disappointing -26.2% in December, albeit performance was once again slightly ahead of commercial high street like-for-like sales which fell by -31.4% in the same period.

While many commercial retailers have been able to rely on their online channels to offset the impact of lower in-store sales, many charity retailers are not in the same position. However, a recent poll of charity retailers conducted by BDO suggests that 85% are looking to expand current online sales operations and 8% are looking to introduce online sales where none previously existed.

Fiona Condron, Charity Retail partner at BDO said: “We were beginning to see encouraging signs at the beginning of quarter four, but new lockdown restrictions brought any hopes of a sustained recovery to an abrupt halt.  

“Unsurprisingly, the outlook for 2021 remains very unclear, although a faster than expected vaccine roll-out does provide some hope that restrictions may be eased in the not too distant future.

“However, it’s clear that the pandemic is forcing many charities to rethink their retail strategies. Many are now looking carefully at how e-commerce operations might complement their high street presence to help drive up income.”

ENDS

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