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Despite an encouraging start to the period, lockdown restrictions have “taken their toll” on the performance of charity retailers in the fourth quarter of 2020, with the outlook for 2021 remaining “very uncertain”, according to accountancy firm BDO.
According to BDO’s Charity Retail Sales Tracker, produced in association with the Charity Retail Association, charity retailers had initially performed “relatively well” compared to commercial high street stores in October 2020.
Total like-for-like sales were down by only 19.2% during the month, against a like-for-like decline of 27.7% across in-store commercial high street sales. However, as new lockdown restrictions were put in place towards the end of the month, charity shops suffered an “immediate impact” on trade.
When stores reopened in December, pre-Christmas sales provided an initial boost to their trade before stricter lockdown measures suppressed sales in the second half of the month. Total like-for-like sales were down by 26.2% in December, albeit performance was once again slightly ahead of commercial high street like-for-like sales which fell by 31.4% in the same period.
While many commercial retailers have been able to rely on online channels to support them through the national lockdowns, many charity retailers are not in the same position, BDO notes.
However, a recent poll of charity retailers conducted by BDO suggests that 85% are looking to expand current online sales operations and 8% are looking to introduce online sales where none previously existed.
Fiona Condron, Charity Retail partner at BDO said: “We were beginning to see encouraging signs at the beginning of quarter four, but new lockdown restrictions brought any hopes of a sustained recovery to an abrupt halt.
“Unsurprisingly, the outlook for 2021 remains very unclear, although a faster than expected vaccine roll-out does provide some hope that restrictions may be eased in the not too distant future.”
She added: “However, it’s clear that the pandemic is forcing many charities to rethink their retail strategies. Many are now looking carefully at how e-commerce operations might complement their high street presence to help drive up income.”
