The Rise and Rise of Retail
Research shows that income from retail activities is now the largest single source of funding for for hospices.
One of the few plus points in the present economic gloom has been the success of charity shops. But just how important retail income has become became apparent to me on viewing the results of the latest benchmarking exercise db associates runs with Hospice UK.
Looking back to the Hospice UK accounts report for the 2020 year end, the top three gross income streams were as follows.
Statutory £415m, Donations £380m, Retail £376m
Obviously, the retail figures would have been slightly higher if we had not had the first national lockdown from 23rd March. A pro-rata figure would equate to around £382m, so just above donations (which excludes legacies). But still well below statutory income.
Looking now at the aggregated totals for the 86 hospices who shared their 9 months figures for the 2023/24 year and there is quite a different picture.
Retail £154m, Statutory £140m, Donations, £118m
Retail is now not only a long way ahead of donations, it has also surpassed statutory income. The growth in the past year of 10% across the 86 hospices was higher as well, with statutory at 9% and donations 8%. It would be very surprising if the figures for the whole sector told a different story.
Although I don’t have the data to prove it, I’m sure much of the growth in recent years has been from on-line sales which, of course, many hospices invested in during the pandemic. There is at least one hospice where this operation grosses more than any of their physical outlets.
I have also heard from several hospices that significant investment in shop infrastructure has paid dividends in returns. Moreover, hospices are innovative in their approach to retail. Take a regular look at the Charity Retail Association's news pages and you will frequently see case studies of new initiatives from our sector.
Based on the 9 month benchmarking figures mentioned above, Hospice UK are now projecting an average deficit of £377k per hospice for the current year. This will represent the worst figures in the sector’s history.
Given this, some trustees might be tempted to reduce their spend on income generation. However, those whose reserves are still healthy would best use them as a springboard to try and secure future growth, not simply a sponge to absorb deficits.
Based on these figures, investment in retail could be one way to do this.