Prominent UK charity shops are seeing their profits plummet as they navigate a shifting retail landscape, raising concerns about the long-term viability of traditional fundraising models. According to industry accounts, Oxfam’s retail profit fell by 23% in the last financial year, dropping to £4.9m from £6.4m in the previous period. The rapid change in fortunes for charity shops also highlights their limitations in the face of greater competition. “Quality is the big change marker – it’s gone through the floor.
The British Heart Foundation (BHF), which maintains the largest high street footprint of any charity in the country, has responded to a £3.3m annual loss by announcing plans to close 150 stores. Similarly, other major organizations, including Scope and Cancer Research UK, are either closing or reviewing the operations of their shop networks.
This downturn occurs despite the total UK market for secondhand clothing reaching £8.8bn annually, a figure that has quadrupled over the last ten years, according to data from GlobalData. The surge in popularity of digital platforms like Vinted and Depop is shifting consumer behavior, as individuals increasingly sell their unwanted items directly rather than donating them to charity retailers. Rising to £8.8bn a year, according to GlobalData, but these losses come despite UK spending on secondhand clothing having quadrupled over the past decade. It might be having a little bit of an effect – where people have one bag for charity shop donations and one for Vinted – but we believe these effects are significantly mitigated by two things.
Lorna Fallon, head of retail for Oxfam, acknowledged the difficulties facing the sector, describing the trading environment as painful. Recent filings indicate that for every £100 generated in Oxfam stores, only £6 now contributes to their global poverty alleviation efforts, a sharp decline from the £22 recorded in 2022. Despite these figures, the charity intends to maintain its shop presence, partly due to a focus on books and music. Just £6 now goes towards the charity’s work on alleviating global poverty, oxfam’s latest filings reveal that for every £100 people spend in its shops. The figure was £22, the FT reports, as recently as 2022.
The BHF’s situation is equally pressing; after its retail profits dropped from £18.8m in 2024 to £3.6m in the year ending 31 March 2025, the organization initiated a major review. It plans to shutter 90 stores by March 2027, followed by another 60 by the following year, citing an exceptionally difficult trading environment. In June, BHF carried out a major review of its retail arm, which employs almost 3,700 staff, after profits from its shops plunged from £18.8m in 2024 to £3.6m in the year to 31 March 2025.
Structural inefficiencies remain a disadvantage for brick-and-mortar stores, which must contend with high street rents and the labor-intensive processes of collecting, sorting, and pricing donations.
Furthermore, author Tansy Hoskins, who wrote Charity Shop World, noted that the quality of donated items has degraded significantly. She describes the sector as struggling against an avalanche of poor-quality goods that are essentially being treated as waste.
Robin Osterley, chief executive of the Charity Retail Association, acknowledged that fast fashion has undeniably impacted the quality of donations. However, he maintains that online platforms are not the sole culprit, noting that they help normalize secondhand shopping. He also pointed out that many people purchase items from charity shops specifically to resell them on apps, providing a source of income for the sector.
Osterley argued that the November 2024 budget likely caused more damage to physical stores than digital competition. Increased national insurance costs and a lower threshold for part-time staff have hit charity retailers particularly hard, compounding the broader pressures of inflation. In which national insurance increases and the lowering of the national insurance threshold – affecting, osterley instead suggested the November 2024 budget had had a much larger impact on bricks and mortar charity shops.
Richard Hawkes, CEO of Oxfam GB, emphasized that while the cost-of-living crisis has impacted charity retail, there is still reason for optimism. He noted that shops provide a vital community presence and engagement opportunities for over 20,000 volunteers, suggesting the sector must evolve its traditional model to capture opportunities within the growing secondhand market. This wider role remains a vital part of what makes charity retail so valuable.”.
