Value Village facing backlash for spike in prices
Posted Apr 2, 2022 01:57:00 AM.
Value Village has long been a favourite among thrifters of all stripes – those who rely on them for affordable clothing and home goods, those looking for a rare or coveted vintage item or environmentally conscious shoppers.
But over the past several months, shoppers have noticed a sharp increase in prices at the for-profit thrift department store that prides itself on encouraging sustainability.
“Value Village’s pricing has definitely surpassed other charity shops and even other vintage antique shops,” said vintage reseller Jodi Lai, owner of Moonshine Vintage.
Thrifting is trending
Those active in the thrifting and reselling community feel a recent surge in the popularity of buying secondhand is partially responsible for driving up prices at thrift shops like Value Village.
Secondhand is “in”
“With apps like TikTok and Instagram being very prevalent in today’s society amongst younger people, trends seem to become hyper accelerated,” said Harrison Snyder, owner of Grail Vintage and founding partner of The Street Market. “A lot of people have now begun to focus on thrifting as a trend, rather than it being a point of necessity.”
Snyder believes big corporations have taken note of the increased interest and are taking advantage of the surge in demand.
“Analyzing market trends and finding a way to capitalize off of that is not atypical,” he said. “Based on personal experience, I know that staff at these stores are looking for items that may be of higher value and are pricing these items higher to target this specific demographic of people. There’s definitely intent behind these price increases.”
Emilly Renaud, national coordinator for Canada Without Poverty, is a former Value Village employee and echoes those sentiments.
“I think a lot more people are getting into a zero waste or more environmental lifestyle, which means that even middle to upper income people are starting to thrift,” she said. “When you all of a sudden have new shoppers with a bigger wallet, a private company is incentivized to raise prices.”
Lai agrees, adding that Value Village prices seem to be mimicking those of antique stores or listings on platforms like eBay and Etsy, where resellers tend to offer high ticket items.
“They mimic those prices in the store, but without the curation or the cleaning or the repairs that antique stores or vintage shops would put into that. And so they’re charging antique store prices without the antique store service that’s attached to it,” she said.
Some have also pointed a finger at the recent influx of small vintage resellers in the market for driving up prices. They often source items from thrift stores, clean or restore them and sell them for a profit based on their cost, efforts and comparable prices online. But Snyder says they simply do not make that large of an impact on prices.
“Oftentimes these individuals are going into stores looking for very specific items and it’s not like these people are clearing out entire racks. They’re going to the stores looking for very specific items that fit their niche and they’re walking out of the store with maybe one or two bags of items and of course leaving items for people that do need them,” he said.
Lai also says she is careful not to buy essential items that are needed by those unable to buy them brand new.
“I never do winter coats or winter boots or the necessities. I’m very careful with what I’m purchasing and I make sure not to clear out all the shelves because I think it’s really important that these people have access to more affordable goods for their own homes,” she said.
In their initial public offering (IPO) filing, Value Village seems to suggest that they are indeed looking at thrifting trends as a growth driver.
“The U.S. secondhand market, which is a subset of the broader retail market, is expected to reach $36 billion in 2021 and is expected to grow 21 per cent annually to $77 billion by 2025. Thrift accounted for approximately 60 per cent of the total secondhand market in 2021, and we believe we benefit from the powerful secular trends driving growth in the sector,” reads the IPO.
For-profit business model
Value Village makes it clear on their website and store signage that they are a for-profit enterprise and buying from their stores does not support a non-profit, which is a commonly held misconception.
The company sources its goods from donations collected at their community donation centres on behalf of non-profits. They pay their charity partners for those goods, which they then sell at their store locations for a profit.
Marketing professor Marvin Ryder says the pandemic has led to a hike in the price of doing business across the board. Rent and labour costs have increased and like all other businesses, Value Village has had to make adjustments, passing on those costs to the customer.
“As a result, even though they buy these donated goods at a pretty good price, their markups have had to go up to cover their increased costs,” he said.
However Ryder too agrees that trends do have some part to play in their recent pricing model, despite their purchasing costs remaining comparatively low.
“Price sensitivity for vintage items has changed … the reason to go thrifting has changed. It used to be strictly, ‘I want to save money, I want to be able to buy a shirt for $5’ … now it’s more ‘I want to buy a certain kind of jean and help the environment … And therefore I might be willing to pay $12,'” said Ryder. “This has allowed Value Village to increase its prices.”
However, Ryder says he does not believe the company is trying to “gouge customers,” but simply that rising costs and current market trends have created favourable conditions to increase prices.
He further explains that businesses generally pay attention to a “triple bottom line.”
“In trying to assess the success of my business, I will look at my profit margins — profit remains an important part of this — but I also tend to look at my impact on the world around me. We call that my ‘environmental influence.’ And then we also tend to look at the quality of life of our employees. And we say ‘we’re prepared to lose a little something over here to do a little better over there’,” he said.
“I think in the case of value village, while it is a for-profit company and they don’t hide from the fact that they’re to make money, I don’t think their mission is to maximize profits. They’re there to get a reasonable return, but at the same time try to divert things from the waste stream, try to allow this reuse philosophy to come forward and then at the same time fulfill a mission within the community.”
Falling short of the mission
Value Village’s slogan says they are “committed to making second hand second nature,” championing reuse to keep millions of items out of landfills.
However, Lai says their soaring prices are counterintuitive to that mission.
“The prices have increased to the point where sometimes it’s cheaper for me to buy something brand new than it is for me to buy something secondhand, which defeats the purpose of thrifting,” she said. “The bargains that were to be found was a huge motivator for people to shop secondhand. And now that it’s so expensive, I’m worried that it will drive people away from doing that.”
Renaud says that also rings true for low-income families and individuals who rely on thrift stores for necessities like clothing at affordable prices.
“Fast fashion is the more affordable option, which is quite backwards,” she said. “It’s not that Value Village in itself is responsible for providing affordable clothing. It’s just really unfortunate that one of the options that was out there for low income families is just now out of reach.”
Ryder says Value Village broadly serves a two different target markets — those looking for affordable goods and higher income “treasure hunters” more interested in the vintage aesthetic or the eco-friendly aspect of shopping secondhand.
“So you’ve got two different markets — one which is terribly price sensitive and one which is not and I’m not sure Value Village, in a way, cares which market feels better served,” he said.
Renaud adds that there are larger systemic issues at play, pointing to a lack of social security nets for low income groups. The loss of a source like Value Village only exacerbates the issue and she feels it will inevitably mean they will have to settle for even less.
“They’re going to have to probably revert to church charities that have probably lower quality items. Value village is something that indirectly always prided itself on servicing lower income Canadians and they certainly don’t do that anymore,” she said. “As someone who did the training as an employee and was sort of sold the image of ‘we help people who need more affordable items, we help deter things from landfills’ — I don’t think they’re really living up to that as much anymore because the lowest income Canadian just simply cannot afford Value Village.”
CityNews reached out to Value Village to better understand the changes in pricing and the reasons behind it, but did not hear back before publishing.