What are the key predictions for charity retail in 2025?

Background

The predictions over the past few years have generally been accurate, however with the change of government in the UK, and the economic changes implemented after their first budget, makes this year more challenging, plus, the instability across parts of the world.

The most positive is the growth of awareness of climate change driving the desire to purchase used clothing etc from charity shops with many of these customers being the younger generation.

Market Conditions

The market conditions will be challenging for charity retailers who have under invested in their retail businesses and people over the past few years. Its going to be increasingly important to ensure the customer journeys, use of retail space and pricing in every charity shop is 100% to best practice because customers are going to be increasingly demanding. Training and developing the retail team on customer journeys, use of retail space and pricing would be a good option.

Shopping online especially for bargains and reused items are going to continue to grow most likely by 0.5% to 1.0% so investing on the efficiency of the charity online operation would be a good consideration.

Market Trends

• The debates if to expand or consolidate or contract the retail business will continue throughout 2025.
• The desire to open Superstores will continue and most likely gather pace due to the high profits of the best.
• The cost of shop fitting will continue to increase unless charities use a more creative solution.
• There will be more charities closing their retail businesses in 2025.
• A growing number of customers will use charity shops that get their offer right.

Predictions

Charities will most likely fall into three categories in 2025 in terms of their approach to their retail business.

1.  Accept lower profits from the existing retail business and consider contracting the retail business.

2.   Set a challenging budget and expect the existing retail team to deliver a sales growth to cover the additional costs to deliver similar unrestricted income.

3.   Get expert advice to optimise the existing retail business to deliver an increase in unrestricted income

Summary

Whilst 2024 was defining for many charities 2025 will be even more defining for a growing number of charities. Some will do exceptional well, as they will be set up to fully take advantage of the future market conditions. 

There is no doubt it is going to be a challenging year but with the right expert guidance and the right retail strategy it could be an exceptional year for some charities.