Nonprofit Thrift Shops Face Increased Coolness – And Competitors
(Photo Courtesy of Goodwill Industries International)
A July sale of three Goodwill thrift retailer places in North Carolina and South Carolina to personal fairness agency Metrolina Capital made sense for a number of causes, a Goodwill official stated. Metrolina put round $13.3 million within the arms of the previous house owners, Goodwill Industries of the Southern Piedmont. The cash will additional the nonprofit’s profession coaching and household stability packages.
In return, Metrolina, which has been including Goodwill properties to its portfolio for some time, leases the websites again to Goodwill whereas including viable companies to its portfolio.
“Viable” is perhaps promoting the retail thrift trade brief. “It’s a great time to be within the thrift industry,” stated Kent A. Kramer president and CEO of Goodwill Legacy Group, Indianapolis, Indiana. “The financial system has been pretty secure, so persons are buying new issues and changing issues and recycling issues.” Since 2020, when the COVID-19 pandemic led individuals to wash out their closets, he estimates that yearly has introduced between a six and eight p.c improve in foot site visitors all through all the Goodwill retail community.
Thrift shops are largely reliant on donations (just a few buy gadgets for resale), and dropoffs have been booming as effectively. “People have gotten extra acutely aware of what’s being thrown away and what could be donated,” Kramer stated. “The want to maintain issues out of landfill, be good stewards of the setting, and in addition assist good causes – you are able to do all of that donating to nonprofit operations, so there’s extra of that occuring.”
Retail thrift’s resurgence has been so pronounced that it’s enjoying an elevated function in authorities financial evaluation. Secondhand attire has joined automobile gross sales in Consumer Price Index (CPI) calculations. This product class’s significance is more likely to proceed to develop, as youthful generations more and more embrace thrift shops when creating a private aesthetic.
“More millennials and members of Generation Z are together with secondhand gadgets amongst their attire purchases, with 42 p.c of every era procuring secondhand garments in some unspecified time in the future in 2020,” Bureau of Labor Statistics (BLS) Economist Sarah Van Giezen wrote this previous May within the report Turning thrifty: incorporating secondhand attire into the Consumer Price Index.
“In truth, over 20 p.c of every era was shopping for secondhand garments every month in 2024,” Van Giezen wrote. “Upcycling (the repurposing of previous or discarded gadgets or supplies) has additionally change into a well-liked development with Generation Z on social media.”
Thrift shops have more and more embraced on-line gross sales channels, and the wealth of knowledge in product descriptors contributed to the BLS’s consolation in including secondhand garments to the CPI. According to Van Giezen, detailed descriptors on secondhand garments gave the BLS confidence that its worth change calculations had been primarily based on evaluating gadgets of comparable high quality.
Kramer speculated there is perhaps a number of the reason why a Goodwill would promote its properties, corresponding to a chance to infuse money into the group, a want to open shops in newly acknowledged viable areas or a chance to open a bigger retailer, or sorting or distribution middle. “There’s often strategic progress behind if you see the sale of a Goodwill retailer,” he stated.
A spokesperson for Goodwill Industries of the Southern Piedmont stated by way of an e-mail that the shops would proceed to function, however declined to supply additional remark. Metrolina Capital didn’t reply to requests for remark.
For Goodwill total, nevertheless, the main focus is on enlargement. Kramer’s territory contains Indiana, Illinois and Puerto Rico, and he has had conversations with representatives from most of the 150 Goodwill organizations throughout the United States. “Our foot is on the fuel,” Kramer stated, by way of Goodwill’s retail enlargement exercise. “It is leasing areas. It is shopping for current areas and retrofitting them for Goodwill. It is shopping for land that may be developed into Goodwill shops, in addition to warehouses and people forms of issues to assist assist the system.”
Based on his conversations throughout the enterprise, he estimated that between 40 to 50 amenities throughout the nation might be opening through the upcoming 12 months.
His personal territory inside the continental United States is pretty saturated with shops. The territory contains 94 shops, together with 4 “outlet” shops that promote gadgets by the pound after the gadgets haven’t bought piecemeal within the different shops. Kramer’s subsequent anticipated enlargement can be one other outlet, as there’s sufficient overspill stock from the normal retail shops to assist it.
That saturation was a part of what made him elevate his hand and tackle the Puerto Rican enlargement. Since March 2025, he has opened 4 shops and a warehouse in Puerto Rico, and has two extra shops beneath development.
“Puerto Rico is a retailer’s dream,” Kramer stated. “Twenty-five p.c of the GDP is retail, and there was no Goodwill presence there. So, we noticed it as a terrific alternative to not solely do thrift, but in addition to convey the mission of Goodwill to Puerto Rico.”
Like Goodwill, The Salvation Army is seeing a marked uptick in thrift procuring. “The total issue is thrifting is a cool factor nowadays,” stated Lieutenant Colonel Mark Nelson, commander of the Salvation Army Western Territorial Adult Rehabilitation Center. “The youthful generations see it as a flex. It’s added worth to say they’re thrifting and being worth acutely aware, serving to the financial system [and the] ecology of our planet. All these issues are positives that make thrifting extra mainstream and extra cool.”
Nelson, too, has felt the strain of sustaining the standard of what the shops show. Part of that shift has been in how the Western Territory collects items.
“We not provide truck pickups to donors who name us,” Nelson stated. “We discovered over plenty of years that was a declining yield for us, price versus profit, and we’ve pivoted extra to creating positive that our donation alternatives are in the very best areas to seize the best high quality items.” These embody specializing in company donations of bulk gadgets, and drives amongst house owner associations or church buildings in higher-income areas. “That helps us to lift the yield and the worth of the donations we’re getting,” Nelson stated.
Beyond what’s being provided, the Western Territory has been enhancing the retail expertise inside its shops. The normal thrift retailer shamble has given solution to easy-to-maintain flooring, fixtures which might be cleaned and arranged to greatest showcase choices, and common planograms – directions concerning the place and the way merchandise classes are displayed.
Under the planograms, every retailer offers a constant procuring expertise throughout all places, presents best-selling or highest-margin choices prominently and shows all merchandise in methods designed to maximise gross sales. These modifications vary from grouping attire in response to measurement slightly than coloration, hanging gadgets so their worth tags are seen and persistently in the identical house to “right-hand” layouts that present unconscious prompts that foster a snug procuring expertise.
The group has additionally positioned a premium on gross sales affiliate coaching, with a give attention to offering the identical degree of buyer care a consumer would possibly discover in a non-thrift retailer.
These modifications are being carried out throughout all 91 of the Salvation Army’s Western Territory’s shops. That quantity will seemingly change: inside the previous decade there was some contraction amongst underperforming shops, however because the thrift trade has boomed a double handful have come on-line, and there are presently “two or three” in progress, in response to Nelson.
“Those are across the 10,000-square-foot vary, the place we used to go as much as [20,000] and we discover these to be extra worthwhile,” he stated.
The group has additionally modified its location selection technique. Nelson has leaned into the concept of selecting places primarily based on the standard of donations, with the expectation that consumers will make a retailer that persistently gives high-quality items a vacation spot. His expectation has been borne out in outcomes, he stated.
While a give attention to merchandise provided has paid off for the Salvation Army, Angie Houloose, government director of the National Association of Resale Thrift Shops (NARTS), in Polk City, Florida, gives a reminder that the explanations individuals store at thrift shops can change between generations. Organizations that need to seize as many potential clients as potential want to know the whys behind the buys.
As Nelson famous, youthful persons are more and more embracing thrifting. But Houloose offers perception into their motivation, and more and more it has much less to do with being thrifty. For youthful consumers, thrift shops have gotten the primary place they go to replace their wardrobes.
Thrift retailer entrepreneurs need to acknowledge this modification in perspective, particularly as older generations of consumers “cycle out.”
“Messaging has to alter primarily based off who their shopper is,” Houloose stated. “You have a youthful era that wishes to search out one thing nobody else goes to be carrying, they usually need messaging that talks to that. But my mother, who’s 95, just isn’t in search of extra stuff. She needs to assist the mission of the shop. And then, you’ve treasure hunters who like to go in and see what they will discover and what they will make out of it.”
Each of those buyer varieties, nevertheless, must be reminded of the mission behind the shop, which is more likely to resonate particularly as their clients change into extra world-savvy. Nonprofit thrift shops that fail to construct attachment via empathy with their mission would possibly discover they lose youthful consumers as they age up and their causes for procuring change.
“When they flip that change and inform their story in a approach that the youthful generations, center generations and older generations perceive why it’s necessary now and going to be necessary 10, 15 years from now after they’re in a unique a part of their, the shops are going to get them hooked and maintain them for his or her lifetimes,” Houloose stated.
The thrifting growth has not been distributed equally, nevertheless. At ReStore, Habitat for Humanity International’s house development and enchancment provide thrifts, donations are extra on the mercy of a single issue – housing begins and enchancment developments – than most different nonprofit thrifts. Beginning in 2021, the variety of annual housing begins has dropped steadily, from 1.6 million in 2021 to only lower than 1.36 million in 2025, in response to U.S. Department of Housing and Urban Development knowledge.
Habitat’s ReStore donated inventory has historically been made up of, in descending order of amount and proceeds, furnishings, cupboards, flooring, house items, home equipment and constructing supplies. The slowing of housing begins and refurbishing has left its mark on the retail operations, with donations to ReStores slowing.
“We’ve seen a little bit of a decline in our gross proceeds,” stated Carmen D. Smith, vice chairman of U.S. affiliate providers at Habitat for Humanity International. “More considerably, we’ve seen a decline in a few of our revenue margins.”
Increases in costs have additionally had an affect on donations. In years previous, company donors and different important companions would have thought of ReStore their main means for disposing of extra materials. “Now it’s choice two,” Smith stated, including that inside the previous 12 to 24 months, massive donors are turning to liquidation gross sales as a approach of recouping prices.
“I don’t suppose we anticipate it getting higher inside the subsequent six month,” Smith added. “The focus for us is on how can we be resilient to what we’re seeing, after which how can we additionally stay related.”
Some shops are growing their give attention to non-building supplies, corresponding to clothes or family items, however these have historically made up a small share of the shops’ proceeds, and Habitat management is cautious of diluting its distinctive gross sales proposition by relying too closely on these product classes.
A big share of ReStore clients historically have been both contractors or do-it-yourself fans. ReStore has just lately had some success pitching its choices to clients who take satisfaction in offering housing options and satisfactory shelter inside their communities, in response to Smith.
To maintain clients coming in, ReStores have to supply supplies clients want. In some circumstances which means buying a few of the easiest-to-move provides, corresponding to flooring or paint, though bought product presently quantities to lower than 15% of the group’s whole gross proceeds.
The group’s retail footprint has felt a pinch as effectively. Between 40 and 45 ReStore places have closed through the previous yr, though Smith is fast to level out that eight have opened.
Given the character of ReStore’s product combine, places aren’t as straightforward to return by as they’re for different retail thrift operations. The cumbersome nature of each purchases and dropoffs means house for drive-through entry is prioritized.
Smith’s remark about earlier donors turning to liquidation gross sales versus making donations echoed a priority Goodwill’s Kramer expressed. “There are for-profit [retail thrift] entities on the market. Some are mother and pop. Some are backed by enterprise capital. There are numerous others on this progress wave for thrift.”
The competitors from the industrial retail house, Kramer added, dilutes the affect of nonprofits’ skills to spend money on the communities they serve. “There’s a number of these [donation] bins. You would possibly see them at grocery shops, and that sort of factor, that simply says clothes on it or one thing. Many occasions, these are for-profit those who by no means point out that they only promote the products in there to make a revenue.”
