Boost to spending in the community outweighs small business concerns about rate relief
The rise of the high street charity shop is one of retail’s most remarkable success stories. Today there are 20 stores operating in Tunbridge Wells, attracting thousands of shoppers each week.
Their popularity has been fuelled by a combination of an economic downturn that has seen shoppers become more savvy about bargain hunting, and charities regarding them as a valuable fundraising asset.
Many organisations have suffered funding shortfalls as a result of receiving smaller national grants, and the trend is set to continue as the Government tightens its purse strings still further over the next few years.
Across the UK, charity shops are enjoying an upturn in fortunes and raised a total of £300million during the past year.
The number of these outlets in Tunbridge Wells may represent a modest figure of just four per cent of the total shopping units, yet it has attracted national chains – including The British Heart Foundation, Cancer Research, Barnardo’s and Oxfam.
With the availability of prime retail space being at a premium, competition is strong when units do come on the market.
Among the key reasons cited for the rise in charity stores is the 80 per cent business rate relief they are eligible to receive – which has vexed some smaller businesses vying for their own piece of the retail market.
Tunbridge Wells businessman Matthew Sankey has in the past raised concerns about the spread of charity shops, having been outbid several times by national charities when potential sites came up in the town centre.
In the opinion of the restaurateur, finding suitable premises is ‘loaded against small firms’ as the business rate relief given to charities makes them a more secure tenant.
His views are not shared by Tunbridge Wells Borough Council. Cllr Jane March, Cabinet member with responsibility for Economic Development, believes charities make a positive contribution to the retail landscape.
She said: “Charity shops bring something positive to the high street, they bring footfall, they act as informal advice centres for people needing help, and they also provide work placement opportunities.”
According to the Charity Retail Association, for every £1 given to charities in business rate relief, around £4.46 is generated for spending on the community. It has argued that UK retail vacancy rates of around 14 per cent mean there are sufficient properties available to go round.
Matt Kelcher, the association’s Head of Public Affairs and Research, said: “Charity shops raise around £300million for good causes every year.
“This has a direct, beneficial impact on communities across the country because charities use the funds to alleviate poverty, run local hospices or fund pioneering medical research into diseases like cancer.
He added: “These shops also help to reduce vacancy rates and therefore keep the high street populated and busy, even during the severe economic downturn. This has a clear advantage to local economies.”
Carolyn Perolls, Executive Director of Hospices of Hope, said they have 15 shops across the region, including branches in Tonbridge and Tunbridge Wells which employ four staff alongside their volunteers.
“Charity shops are a major feature of the high street and help maintain trade in local towns,” she said. “Many of our team develop their skills while volunteering for us, and this gives them the confidence they need to further their careers.”
Though many charities have continued to expand in town centres, some smaller organisations have encountered challenges against a wider backdrop of economic uncertainty.
The Bridge Trust, a homeless charity, has two shops in Tunbridge Wells, yet has come under considerable pressure to sustain its operations.
Director John Handley said financial constraints on the organisation had forced it to sell one of the properties used by its clients across West Kent.
With annual running costs up to £500,000, its most recent annual report showed it made £172,000 from its stores in Tunbridge Wells and a furniture warehouse in Paddock Wood.
While its store sales helped out, the charity’s overall results showed it had struggled to break even with its operations.
Mr Handley, who is based at The Bridge Trust’s offices in Quarry Hill Road, Tonbridge, said: “We have found with our charity shops that we are just not getting the level of stock donated to us which is needed to generate sales, so everything is welcome – and we would always encourage more people volunteering.”
Another charity, Pepenbury, employs 250 staff who support more than 200 adults with learning disabilities. Its retail outlet is particularly valuable for the fulfilment of its ambitions.
Chief Executive Sarah Stookes explained that because Pepenbury operates on small margins, it was imperative that the charity continued to explore innovative means of fundraising.
She said: “We are fairly new to retail but it is an area of focus we are developing. Not only does it allow us to raise our profile within the community, but it also helps us to diversify our income.
“Through our charity shops we provide City & Guilds training opportunities in retail. Only seven per cent of adults with learning disabilities are in paid employment, and our shops are also a way of teaching vocational skills while supporting and enhancing employment opportunities.”
Nick Farthing, Commercial Director of Hospice in the Weald, shared the sentiment about how a retail arm has made a difference to the charity.
He explained that the organisation presently employs more than 200 people who help around 1,600 patients a year, which he felt made a strong contribution to the area’s economy.
Mr Farthing said: “We enjoy fantastic support from the community in all of our 27 charity shops, as people really are very generous. As a retailer who used to work for a large high street chain, I have to say that I would always prefer to see shop units occupied and busy.
“Empty shop units are not good for the high street and have an enormously negative impact on local economies,” he added.
“It costs us £7million each year to provide hospice care in West Kent and East Sussex, and our charity shops are a big part of helping us achieve that. We make more from our shops than we receive in Government funding.”