Charity Retail predictions 2023
What are the key predictions for charity retail in 2023?
Background
We are living in a very traumatic period with high inflation, a war in Europe, increasing interest rates, massive hikes in the cost of gas and electricity, low unemployment, considerable upward pressure on wages so there is little surprise the UK is in a recession.
The current economic climate combined with the changing consumer shopping habits is going to have a growing effect on retail in 2023. The trend is already clear within traditional retail based on national statistics with retail sales -6% over the 3 months of August, September, October 2022. There will be some traditional retailers contracting their retail businesses in 2023 and some will sadly go out of business.
Most charity retailers are doing very well when comparing year on year performance against 2021 based upon the BDO Charity Retail Sales Tracker.
However, those who are not achieving the average or above should urgently review their retail business. The best retail review in the UK
Predictions
1. Varied shops performance
The high street will continue to change with less traditional retailers and some charity shops thriving and opening more shops to build on their success. Some charity retailers will struggle badly and there might already be signs today if a charity retailer is behind the market average performance.
There is already clear evidence of what the four main factors are that will strongly influence performance within charity shops in 2023.
PRICE: Optimise the sales of donations by pricing them to best practice is a key factor. The most successful charities use four brand pillars for clothing and accessories. We would recommend a four pillar brand guide with at least 1000 brands and specialist training because the financial return can be considerable.
SPACE: Scientific use of retail space including hot spots to influence the customer journey within the shops and the shop ambience to improve the customer experience. We would recommend specialist expertise to get this right as the financial return can be considerable.
PEOPLE: Having the right Shop Managers is the universally recognised aspect where charities should focus. However, it is very challenging to recruit so developing your shop managers to be the best possible is a key element. We would only recommend world class commercial training of shop managers to improve individual capability and sales. Skyline have been awarded the best specialist charity retail training business in 2022 and is a very popular choice because of the proven results. Have a read of: Training-and-development
ESTATE: Reviewing the retail estate and considering all relevant aspects of each location to produce a shop-by-shop action plan to ensure the best performance possible is achieved from each location should already be in place.
Overview
Unfortunately, those charities who don’t do all four of the above could find their sales slipping behind the market trend and are highly likely to struggle. The good news is that many charities will grow their unrestricted income despite the rising costs
2. Varied online performance
The changing consumer shopping habits will continue to grow online sales and there will be more opportunities to grow profits online.
Some charities are already investing in making their online operations efficient, automated, and fully integrated. This includes linking the selling channels, logistics companies and EPOS providers together to improve operational efficiency. Most charities are doing part of this but very few are doing all of it. This will change during 2023 with these charities focused on efficiency growing their online profits.
Summary
Those charities not already investing in growing efficiency will do so in 2023 or be left behind online.
