Traders hope for less faith in charity shops

A ROW is brewing at the thriftier end of the high street. Small shopkeepers and some downmarket chain stores are furious about the rapid growth of charity shops, accusing them of unfairly poaching their customers and lowering the tone of the neighbourhood.

Bernard Tennant, director-general of the National Chamber of Trade, which represents 150,000 small traders, said charity shops are increasingly stocking bought products rather than donated second-hand goods, competing with mainstream retailers.

Charity shops have the unfair advantage of rates rebates, as a result of their charity status, and sometimes cheaper rents from altruistic landlords, allowing them to undercut the commercial sector.

Mr Tennant said: 'If they want to get into retailing to that extent, they should play by the same rules.' He said it was politically difficult for local businesses to complain publicly about a charity. The chamber has lodged complaints with the Home Office and local authorities but with little success.

Some chain stores are also becoming more concerned. Ian Gray, chief executive of Brown & Jackson, which owns the 230- shop Poundstretcher discount goods chain, said: 'Things are OK as they stand, but if charity shops move more into mainline retailing, it would seem unreasonable that they should keep the tax advantages for that part of their activity.'

A report published today confirms the increasing tension between charity shops and mainstream retailers. According to the Corporate Intelligence Group, there have been growing complaints by commercial shopkeepers about lost sales and 'charity shop blight' - quiet shopping streets and less popular shopping centres attracting clusters of charity shops.

The CIG estimates that there are 5,500 charity shops in Britain, selling pounds 200m of goods, and their numbers are growing by 300 a year.

The largest charity shop chain is Oxfam, with 870 stores, including three on the Continent, followed by the Sue Ryder Foundation and the Imperial Cancer Research Fund, each with 460. Paul Clifford, Oxfam's home division assistant director, said that the stores contribute profits of between pounds 18m and pounds 19m a year - almost one third of the charity's total income.

More than half the 60 charity shop groups questioned by the CIG said they planned to open more stores. The CIG predicts many large charity shops will move upmarket, stocking more bought-in products. 'Inevitably, therefore, charity shops are likely to come into even greater competition with traditional high street retailers over the years ahead,' the report said.