Charity retailers reported improved performance in August according to a report from accountancy and business advisory firm BDO.
BDO’s monthly Charity Retail Sales Tracker outlines monthly like-for-like sales changes of 13 charity retailers with 2,796 individual stores between them and is produced in association with the Charity Retail Association. Its latest report showed that while like-for-like sales among survey participants were down -28.6% in August, this was a marked improvement on the -44.7% like-for-like decrease recorded in July.
This broadly mirrors the trend seen in commercial high street like-for-like sales, which saw retailers close the gap from -39.4% in July to -28.1% in August, according to BDO’s latest High Street Sales Tracker.
Sales of donated goods appear to have driven this, with a like-for-like decline of -28.1% compared to a decline of -43.5% in sales of new goods.
Almost half of participating charity retailers highlighted the successful re-opening of their stores, with some already operating all of theirs and others expecting to do so in the run up to Christmas or in early 2021.
However, footfall and staffing levels in particular remain a challenge for charity retailers while some charities reported concerns around the quality of donated goods.
The report also highlights significant disparities in Gift Aid conversion rates. While very large charities recorded an average conversion rate of 36.73%, this fell to 20.99% for medium sized charities.
Fiona Condron, charity retail partner at BDO said:
“While the picture has been improving for charity retailers, there remains a significant gap to traverse before like-for-like sales are back into more ‘normal’ territory. Nevertheless, the pace of recovery is encouraging as shops continue to reopen – with one charity retailer even reporting higher-than-expected sales this month.
“However, with new Covid-19 restrictions now in place, and worrying signs that infection rates are once again on the rise, the outlook remains very uncertain. While many commercial retailers are able to rely on online sales channels, charity retailers with less sophisticated e-commerce operations may find themselves more susceptible to the impact of any reduction in footfall.
“While sales remain subdued, charities need to focus on maximising income. Our survey shows a big disparity between charity retailers when it comes to Gift Aid conversion rates, so this would be an obvious area to target.”
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