Charity shops unfair advantage over small businesses

17 March 2006:

The new breed of professional charity shops are undercutting small businesses and should no longer benefit from tax breaks, a leading business pressure group has claimed. The Forum of Private Business (FPB) [http://www.fpb.co.uk] said the complexion of charity shops had changed enormously in recent years and many big name charities are now competing directly with small businesses. The current estimate for the number of charity shops in the UK is about 6500, and there are hundreds in London alone.

"Small businesses are becoming increasingly frustrated with the new style chain charity shops which are actually more like businesses with the buying power of a major retailer," the FPB's campaigns manager Victoria Carson said. "The line has become blurred. Many charities like Oxfam and Sue Ryder are now aggressively competing in the commercial market place, employing professional staff selling a range of new goods. They have disposed of the volunteer-led shops selling cheap donated goods. Yet they still keep their costs down by benefiting from generous tax breaks, such as the 80% mandatory business rates reduction."

Meanwhile, she said, smaller businesses have to meet overheads such as rent, rates, the minimum wage and corporation tax. While the FPB is supportive of charity shops, it argues that they must compete with their small business neighbours on an equal footing.

Small businesses, as the engine room of the UK's towns, villages and cities, must be supported and protected by the Government locally and nationally, Ms Carson said. They are already feeling tremendous pressure from the supermarkets, out of town shopping centres and aggressive parking regimes.