How to beat your retail budget


When every new retail budget is produced there is an expectation that both the sales and profit budgets will be achieved. However, irrespective on how a charity retail budget is arrived at, very few consider the true potential of the retail business but instead base a charity retail budget firmly on current performance and the qualitative commentary produced by the retail leadership.

If the shop budget is a good indicator of what sales and profits every shop is expected to achieve why do different charity shops in the same location achieve very different sales and profits?


The key to achieving the current retail budget starts with a clear understanding of the true potential of every aspect of the current retail business.  The process sounds simple, but most charities don’t do it because the analysis followed by a robust plan to optimise the sales and profits is difficult.

However, when a charity knows the true sales potential of each shop and their online business plus the ideal retail structure and people costs then there is an opportunity to develop a plan to not only beat the budget but to change the budgeting process in the future.


1.  A detailed analysis of the retail business that includes all of the following four elements (all of these elements must be analysed due to the complex interdependencies):

 The donation value: The average of value for ‘all over the door’ donations in every shop and donation point (donation centre, collections bins etc).

 The in-shop customer journey: Including the window, use of Hot Spots, use of retail space by produce category, the shop layout, pricing of donations (consistency and accuracy), the shop ambience (including visual merchandising) and customer service.

 Online efficiency: Too often the online business is not a focus for charities, yet if it was more efficient and use modern best practices then the profits will greatly improve. The analysis should include the Supply Chain (available donations and how they become available to sell online), the Selling Platforms (there are more than just eBay) and the Distribution (delivery process is often very manual rather than automated).

 Retail Structure and operation:  Most retail structures evolve and develop over a period of time, very similar to how the retail operations are what they are today.  Comparing the retail structure and operation to best practice whilst considering the individual and unique elements of the retail business will produce some recommendations to ensure the business in the future is both highly efficient and the profit is close to optimum.


To achieve the retail budget most charities, focus on doing what they have always done only hopefully do some elements better.  Imagine if you knew the true potential of the whole retail business in granular detail as well as the total business.  With this information the retail budget in the future can be completed with a plan to work towards achieving the true potential of the retail business.  Whilst this might take two years the level of improvements based on the charities we work with are very significant. 

This year’s retail budget can be beaten by simply picking the low hanging fruit if the above process is followed 100%



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