Thursday 11 August 2011

Charity Shops as Unfair Competition?

They have the potential to serve four purposes in that they offer a social service, enable the recycling of goods, help to raise awareness of the charity and provide a fundraising medium. With increased professionalism in their operations, competition has escalated for customers, goods and volunteers, both with other charities and with established retailers. With approximately 7000 shops generating £170m in profit and more than 160,000 volunteers nationwide, charity shops have several advantages over other retailers
-       80% business rates relief because of charitable status, often a tipping point towards liquidation for regular shops
-       Allowed to gift-aid their profits. This means they receive back the basic rate of tax paid by each customer i.e. the sale of a book in a charity shop for £4 would actually result in the charity receiving £5
-       Ease in paying high street rents. With low staffing costs (a typical charity shop will have one paid, full-time manager and around 16 part-time volunteers) means more of their turnover can go towards paying rent)
Next steps retail consolidation, increased political clout, more choosiness ref donated goods, and coping with some of the issues associated with swimming amongst the bigger fish?
Time for the OFT to check out the sector, if only as a warm-up exercise before reverting to major mults issues?

1 comment:

Anonymous said...

Seems a little harsh, they are after all 'Charity' shops!!