Oxfam, Barnardo’s and Salvation Army issue update as report warns of charity shop closures

Oxfam, Barnardo's and Salvation Army issue update as report warns of charity shop closures

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Some of the UK's leading charity shops have not ruled out further store closures this year. A recent report from the Charity Retail Association (CRA) said some of the nation's biggest charity shops are set to follow Scope in shutting stores in 2025.
Scope, a disability charity, announced the closure of 77 of its 138 stores across the UK earlier this year due to financial struggles. According to the CRA report, other UK retailers said that "this is the worst time for trading they have ever encountered" and shops would "unlikely come out of this 100% unscathed". The Express has since spoken to a number of the nation's biggest charity shops, including Barnardo's, Age UK, Salvation Army, the British Heart Foundation and Oxfam, to see if they had plans on closing stores during the remainder of this year.

In a blog, CRA’s directors wrote: "We’ve already seen a significant reduction in the shop estate of one of our most experienced and sizable members – Scope – and anecdotally we’re aware that there are others of our larger members in particular who are considering similar action.
"There appears to be a bit of a perfect storm at the moment, with income being relatively flat, and cost pressures being almost unprecedented. These two factors are combining to hit profitability in a way that most charity retailers have rarely seen before."

The blog explains that costs have increased for charity shops while income levels remain "modest" across the board. As well as increases in rents and utility costs, there has also been a recent increase in the National Living Wage and National Insurance contributions.

Chancellor Rachel Reeves announced a rise in employers’ National Insurance contributions by 1.2% to 15% in her October budget. She also lowered the threshold for employers to pay the tax from £9,100 to £5,000. The Labour government also increased the national minimum wage from £11.44 to £12.21 an hour.
In a recent survey of 52 CRA members, 36% said they might reduce their number of paid staff or working hours in response to rising costs. Meanwhile, 27% said they might close shops, while 38% said they might scale back plans to open new shops, and 21% said they might reduce trading hours.
CRA's chief executive Robin Osterly said in a webinar last month that bigger charities are struggling more than smaller ones. He explained that the British Heart Foundation, Barnardo's, Oxfam and Cancer Research UK have suffered a decline in sales.

He said: "Across those four charities, there’s been quite a significant decline, and that has pulled the overall sector figures down. We’re slightly struggling to understand why that is.
"One of the reasons why it might be is because they’re so dominant in the market overall, a poor result in one of those charities is likely to drag down the whole sector a bit more than it would otherwise do. If you extract the very large charities from those Q4 figures, you end up with a [like-for-like] sector growth of around 3.5%."
Here is what some of the biggest charities across the UK said about the situation.
British Heart FoundationBritish Heart Foundation, which operates around 680 shops across the UK, said the charity experienced a difficult 2024 and expects to see a further reduction in profit this year. Mike Taylor, Commercial Director at the British Heart Foundation, said there will be both shop openings and closures in 2025.
Mr Taylor said: "The reduction in profit is down to the combination of high inflation and interest rates impacting customers' disposable income and increasing our cost base."
He added: "As part of good estate management, or where landlords want to take the shops back, we expect to continue to close a similar number of shops this year, so net numbers overall will remain unchanged.
"As the UK’s largest charity retailer, we will face the challenges of the external market and opportunities for growth head on. We are not immune to the challenges that the next few years will bring, but we believe there will also be opportunities for both retail format development and AI advancement within our operations to drive efficiency."
Barnardo'sChildren's charity Barnardo's has also not ruled out further shop closures this year. Managing Director Mark Gregory said shops across the UK high street have suffered from "increased operating costs for shops and reduced consumer spending, related to the economy and the cost-of-living crisis," over recent years.
He also cited the rise in online shopping as having a negative impact on charity shops. Mr Gregory explained that Barnardo's shops are regularly under review and will close if they are "not generating a positive contribution".
He said: "Our shops provide vital income for our work with children, young people and families across the UK. We regularly review their performance and, where stores are not generating a positive contribution that we can invest in our work to change childhoods and change lives, then we have to make the difficult decision to close them.
"We’re extremely grateful to all the wonderful colleagues who work in our shops, and especially to our incredible volunteers, to members of the public who make generous donations, and to everyone who shops with us whether on your local high street or online. To find your nearest Barnardo’s shop or to find out how you can volunteer your time to help Barnardo’s support children, young people and families across the UK visit here.”
OxfamRising rent and utility costs are also putting pressure on Oxfam stores in the UK. However, the charity's online shop brought in over £10m in the last financial year, while book sales grew by £1m for the second year running.
Due to the rise of the second-hand clothing market, Oxfam is facing increasing pressure from competitors. A charity spokesperson said they remain focussed on encouraging people to donate clothes and to shop second-hand.
Not only does this support environment sustainability, but it also helps Oxfam tackle poverty and inequality across the globe. Oxfam also encourages people to use second-hand apps which offer fashion that looks good and lasts for a long time.
Salvation ArmyThe Salvation Army also acknowledged that rising costs are making "trading challenging" across their stores. However, the charity has vowed to continue reinvesting in local communities and volunteers.
A spokesperson said: "We also see ourselves as more than a chain of shops, we are community hubs which offer training and practical assistance like warm coats in winter or furniture donations to struggling families. Valuing the local social impact we have as well as the income is key. It means we really invest and retain our local volunteers, and the community feels invested in our success.
"Our high streets need charity shops, and we are pleased that the CRA’s new report recognises the value of community impact as well the financial profit. Charity shops are so much more than a place for bargains, they support the community, provide training and jobs, bring people together and keep things out of landfill."
Save the ChildrenSave the Children said shops are regularly reviewed, particularly at the end of lease or renewal agreements. While the charity has not ruled out further closures, Ian Matthews, Director or Retail and Communities at Save the Children, said they will remain "agile" in their approach.
He said: "We regularly review our network of shops to assess their potential to generate income for Save the Children, particularly when lease break or renewal decisions arise. This is a standard part of how we ensure our retail operations remain effective and focused on maximising our impact for the children we support.
"We firmly believe that staying responsive to changes in the retail landscape is essential. To remain effective, we must be agile and continuously evolve our approach. Our goal is always to face challenges with creativity, so we can continue to make the greatest possible contribution to Save the Children's vital work."

Age UKAge UK is not planning on opening or closing any shops in 2025. However, the charity's Retail Director has urged people to continue their support during an "exceptionally tough time".
Nick Smith said: "Charity shops have faced a number of challenges in recent years due to the ongoing challenges in the economic climate both for businesses and customers - all of which have placed a strain on resources and affected shopper’s behaviour.
"Although we have no plans to open any new shops, we also have no plans for closures at this time. However, while overall donations and public support for Age UK’s charity shops remains steady, the quality and quantity in some areas is in decline, which is why we need support from the public so that we can continue to be there for older people, especially now during these exceptionally tough times."