Does Britain have too many charity shops?

Apart from putting them into self storage, one of the most common ways people get things they no longer need out of the house is to donate them to charity shops.

Obviously, this is mutually beneficial; the people donating the goods improve their mood by getting rid of them and feeling they’ve done something for charity, while the shop is able to raise money by selling the goods on to other people. This money can then be used to fund the valuable work charities do, benefitting all the people they help.

Yet this arrangement may now have been taken too far. Charity shops have become so numerous on many high streets that they could now be accused of undermining the normal shops that surround them, with areas that are dominated by charity shops often regarded as ‘blighted’ and unattractive locations for shopping.

Is this really happening on the high streets of Britain today? Storage.co.uk investigated the issue to see what it could find out.

Charity shops outnumber self storage centres

A good starting point for this debate is the actual number of charity shops in the UK, which according to the Association of Charity Shops is around 7,500.

Surprisingly, this means they actually vastly outnumber several other types of shop which are often thought to be so common they are treated as ubiquitous.

For example, Britain has only around 1,200 branches of McDonald’s, and, perhaps more surprisingly, a mere 666 Starbucks coffee houses (a number which probably seems significant to certain critics). This means there are 11 charity shops for every single branch of Starbucks.

Independent bookshops partially overlap with charity shops, as the latter often sell large volumes of donated books at very low prices as part of their stock. Indeed, some charities, notably Oxfam, now have some branches that are dedicated second-hand bookshops, selling only donated books.

Therefore, it is troubling to learn that Britain now only has a mere 1,200 independent bookshops left, with 102 closing last year alone. While other tides have done more to sweep them away than the growing number of charity shops – supermarkets, online retailers, the weak economy etc – it can’t help that charity shops enjoy substantial advantages over independent bookshops in terms of financial support from the government.

The number of self storage centres, as a matter of interest, is now 1,224, although as they aren’t situated in high streets they don’t compete directly with charity shops for people’s wares. Generally, a person having a clear-out will have often made a clear distinction between things they are happy to get rid of completely (which go to charity shops) and possessions they want out of the house but might want to use again, for which they often rent a self storage unit.

Charity shops enjoy a range of advantages

Charity shops do enjoy a range of advantages over ordinary shops that may help to explain their proliferation during these tough economic times.

Firstly, they receive 80% relief from business rates on account of their charitable status. Business rates, a tax imposed by the council for occupying commercial premises, represent a major annual outgoing for most shops, with the average charge in 2010 amounting to £11,432, according to the financial website ThisIsMoney.co.uk.

Having to pay punitive rates is one of the factors which is often cited as a tipping point for pushing struggling shopkeepers into the red, and ultimately towards closure. As business rates have continued to increase each year during the recession, 1 in 7 shop units are now vacant nationwide – gaps that charity shops find it easier to fill partly because they pay such a small proportion of this charge.

The other big advantage that charity shops receive is being allowed to gift-aid their profits. This means they receive back the basic rate of tax paid by each customer, which is usually the cost of an item divided by four; for example, the sale of a book in a charity shop for £4 would actually result in the charity receiving £5 if it was gift aided.

While this is obviously a good thing in the sense that the charity is able to receive more donations, it does mean that in terms of paying the expenses charity shops and ordinary shops both share, such as rent and utilities, the former has an extra source of income that is not available to the latter.

Charity shops also have an advantage when looking to obtain premises. The fact they have such 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, enabling them to bid for shop units in more expensive areas.

This helps to explain why charity shops have proliferated on some high-streets after an initial one has moved in, as the smaller number of available shop units is likely to cause rent increases, which charity shops can afford more easily.

Is self storage better than charity shops?

This doesn’t mean that charity shops are bad, or that everyone should put their belongings in self storage rather than giving them away. The two options serve people with different needs, and charity shops are still a perfectly reasonable alternative for people who don’t want to hold on to all their possessions, while self storage exists if they do.

Rather, what this suggests is that charity shops do enjoy substantial advantages over other types of shop, and  – as others have suggested – it would be reasonable to cap the number of them that can exist in any given high street.

An area with too many charity shops gives the impression that local residents can only afford cheap second-hand goods, stigmatizing the people who live there, and possibly acting as a deterrent to home-buyers and people who might otherwise have invested in the area.

They also limit the choices of local shoppers in areas with only one high-street, which is why protests against the number of charity shops have come mainly from small market-towns; just Googling ‘too many charity shops’ brings up local news items from Bury, Honiton, Whitehaven, Welshpool and Newton Abbot, all commenting on this issue, on the first page alone.

What all this goes to show is that, perhaps, in some places at least, the most charitable thing some charity shops could do would be too roll their shutters down for good.

One Response to “Does Britain have too many charity shops?”

1. Edwina says:

   May 16, 2013 at 9:12 pm

   I don’t mind charity shops but increasingly I have noticed they are stocking brand new, (not donated) items. They now sell everything from knitting wool to knickers! This makes it totally unfair to the independent businessman who is struggling against this bitter wave of retail robbery. Charity shops should only have secondary locations to qualify for the rates reduction and should only sell 100% donated stock. Charity shops are killing our High Streets!!