Flight to value has its impact on the Charity Shops
Tuesday, January 12, 2010
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There is good news and bad news for the charity retailers here. First the good news. Oxfam reports that its like-for-like sales are up by 5% compared with 2008. This includes a 7% increase in sales of books, and £2.4million of sales due to its online sales drive - a 70% increase in the year. This is very much in line with teh ‘flight to value’ during the recession, experienced by many other retailers of low-cost goods such as New Look, Primark and Asda which the Guardian reported last week is leaving retailers like M&S and Next stuck in the middle of the market.
On the other hand, Oxfam are also feeling the pinch over the donations that they receive in their shops. The same consumer caution that has caused their sales to rise has also led to fewer donations, which have fallen by 15%. Families are, they think, buying less and replacing fewer clothes and household goods, so they have less to give away. Mr McCullough, the charity’s director of trading, suggests that this could be taken as an indicator of whether the economy is really recovering yet. “Discretionary spending remains low, big sales are starting earlier and discounting harder, and we’re having to work harder than ever to maintain the high quality of donations.” Donations to Oxfam’s shops have “long been a barometer of retail trends in the UK, rising and falling in direct parallel with the strength of the high street - the current mood of optimism may be misplaced”.
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