“Difficult news”: Oxfam Australia shutters stores as not-for-profits struggle with retail reckoning

Oxfam

In another worrying sign for Australia’s beleaguered retail sector, even not-for-profit players appear to be struggling.

Last week Oxfam announced it will shutter its Australian retail arm, closing all 13 stores and its e-commerce website.

The not-for-profit, part of the international Oxfam confederation, has a 50-plus-year retail history in Australia, starting with Community Aid Abroad shops, later rebranded to Oxfam.

For years the sale of fair and ethical trading products has helped fund its charitable operations, but despite opening two new format stores in Sydney back in 2016, the organisation has been unable to beat the retail blues.

“We know this will be very difficult news for our staff and volunteers — and our customers — given how highly regarded Oxfam Trading has been over many years,” Oxfam Australia chief operating officer Tony McKimmie said in a statement circulated last week.

“We sincerely thank them all for their dedication and significant contribution to our core mission of tackling poverty.”

McKimmie cited declining revenue in retail and wholesale channels, including flat online sales growth, as the financial factors behind the shutdown.

It’s a story all too familiar in Australian retail — a myriad of brands with far less noble goals have met similar fates in recent years.

There has been particular pain of late for charitable organisations though, with NSW-based The Smith Family currently undertaking a strategic review of their retail operation.

As part of the review, the organisation is “assessing the right long-term ownership structure” of the business.

“We will certainly keep our stakeholders informed during the process of our review. We believe the recycling operation has an important ongoing contribution to make to the environment and to our communities. It’s important to The Smith Family that this good work continues — this year alone we have diverted about eight million kilograms of textiles from landfill,” Smith Family chief executive Lisa O’Brien said in a statement.

Organisations in the space face the same pressures other retailers do, whether that be meagre consumer spending, rising commercial rents or competition from international retail behemoths.

“You can’t re-sell fast fashion”

Peter Knock has just finished a tenure as the executive director of the St Vincent de Paul Society NSW.

He tells SmartCompany the big players — Vinnies and Salvos — have been disrupted but are working quickly to revise their retail strategies.

“It’s a massive sector but they’re under the same pressures as many other retailers … the issues of differentiation are alive and well.

“The days where you can just put a product on the rack are long gone, unfortunately, the not-for-profit sector has played in that,” Knock says.

Knock says not-for-profit retailers are responding by bringing in more experienced customer service staff and revamping their retail operations, but have been stifled by the rise of fast fashion.

“The rise of fast fashion has meant the quality of donated goods for sale are deteriorating,” Knock says.

“You can’t re-sell fast fashion.”

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Webstruct
Webstruct
1 year ago

I think what is happening is that the not-for-profit sector is experiencing an exposure of its core values, people are not convinced they are 100% genuine, too much profit and exploitation of the poor. They need to re-think their intentions, obviously their communication is not good, just claiming good intentions is no longer sufficient.

Michael Royal
1 year ago

I think the issue with NFPs is that they don’t engage with customers – they are set up in such a way that they don’t appeal to customers and they don’t engender customer loyalty (other than to drop off lots of unwanted stuff). Where are the newsletters, the highlights, the ‘best buys’, etc – they need a savvy retailer/e-commerce person to engage – and they should work with for profit retailers to move ‘good stuff’ which they can’t sell – there are so many opportunities to re-position NFP retailers but they need to engage with the customer on the customer’s terms. We have one near us in Newport (St Vinnies) and it is really a mixed bag from a local’s perspective.