Will Royal Mail’s plan for parcels kill off THOUSANDS more local post offices?


Thousands of post offices could disappear over the next two to three years as shops sharing their premises leave the main street as victims of a faltering economy.

Experts fear that up to 6,000 branches are vulnerable, meaning the 11,500-strong service could be cut in half. The ailing network receives £50 million a year from the government to keep loss-making post offices open, but that will come to an end in just over three years. The government wants PostNL to break even with a ‘sustainable’ model. Last year it reported heavy losses of £597 million.

About 223 post offices closed in the year to March last year. Another 55 stores are closing as a result of the collapse of convenience store chain McColl’s, which owns newsagents Martin’s.

Slap: Royal Mail is promoting its 'parcel collection' service that undercuts prices at post offices

Slap: Royal Mail is promoting its ‘parcel collection’ service that undercuts prices at post offices

Supermarket chain Morrisons bought all 1,160 McColl’s stores in a £190 million bailout, but 132 are being closed to cut costs – 55 of which will have in-situ post offices. When these shops with post offices close, they leave some towns, such as Ware in Hertfordshire (see box), without a bank or post office.

Calum Greenhow, managing director of the National Federation of SubPostmasters, says, “McColl’s is just the beginning. Now that we are entering a recession, other shops will close and with it the post office. I’m afraid the network of post offices will wither.’

The crisis is partly the result of a £1.34 billion post office modernization program a decade ago. This placed more than 6,000 post offices in the back of stores run by the likes of McColl’s, Co-op, Ryman and WHSmith – as well as independent stores.

Most postal workers are self-employed small business owners who operate a “local” post office in a store. They pay the post office a franchise fee to use its branding and provide its postal services.

In return, the post office pays for equipment and training – and a small fee for each postal transaction. Major retailers such as WHSmith and Ryman have larger self-contained ‘main post offices’ within the store which are also franchised.

Greenhow, a Postmaster at West Linton Post Office in the Scottish Borders, says: ‘Ten years ago almost two-thirds of my income came from post office services – the rest from my gift and greeting card shop. Now a quarter of the revenue comes from the post office. If the store’s sales fall off a cliff while the economy goes into freefall, my business could hit the buffers.”

Andy Furey of the Communication Workers Union, representing 500 postmasters, says: ‘We are facing a ticking time bomb where thousands of post offices could close in the next few years because the franchise model is not enough to live on. If the shops in the high streets close, the post office side of the business will also disappear, because it cannot operate without income from a shop.’

Chris Noice, from the Association of Convenience Stores, which represents 48,000 small shops, 10,560 of which also have a post office, says: ‘The post office is not a major earner but provides an essential service, increasing the number of customers entering a store. . But as profits are under pressure, with inflation rising and energy costs rising, that means stores could close – and with it the post office. due to changing shopping streets. habits, predicts research from courier ParcelHero.


Another blow to the survival of post offices, Royal Mail is promoting a ‘parcel collection’ service that undercuts post office prices. Customers are encouraged not to visit their post office, but instead have the postman post the mail for them by booking a mail collection online. Until the end of this year, Royal Mail is offering this service – which previously cost 72 pence each – free of charge.

Although the price of sending letters is the same as at a post office, parcels are cheaper. For example, a 2kg first class medium parcel costs £5.95 online with a postman collecting it, but if posted at a post office it is £6.95. There is no need to print a label, the postman will put one on when he picks up the mail while other mail is delivered to your home.

James Daley, managing director of campaign group Fairer Finance, says: ‘The Royal Mail initiative is taking business away from post offices and making it harder for them to survive.’


So far this year, 617 bank branches have closed or a notice of closure has been announced. As of April, HSBC will close 114 branches. Derek French, founder of the now-disbanded Campaign for Community Banking Services, says: “We now have 100 large communities with no major bank. As a result, for many people and small businesses in these communities, the post office is the last place to do their banking.’

He adds: ‘I fear that many retail post offices will have a hard time surviving as the number of high streets continues to decline. If a shop goes, the post office goes with it.’

Banks have promoted ‘banking hubs’ as a possible solution to the decline in the number of banks and post offices in the high streets.

Managed by the post office, bank representatives will be present at the hubs on certain days to provide customers with one-on-one service.

But despite all the fanfare these hubs have created, only three have opened so far: Rochford in Essex, Cambuslang in South Lanarkshire and most recently one in Brixham, Devon. Another 26 hubs are promised.

Two decades ago there were 18,400 post offices. In 2003, a “city reinvention program” abolished 3,000. Four years later, another ‘network change program’ was introduced which brought the sword to another 2,500.

The Post Office said: ‘We are saddened by the closure of some McColl’s stores operating Post Office counters – while recognizing the difficult high street conditions faced by many retailers.

Our intention to become a self-sustaining company remains our goal. We have to accept that this could take longer than intended.’

City shock as lifeline face axe

The bustling market town of Ware in Hertfordshire lost the last of its six major banks a few years ago – as reported by The Mail on Sunday at the time.

The post office will also close next month. The city, with a population of 19,000, is in shock over the impending closure. Shops along the main street have plastered their windows with ‘Save our post office’ posters, imploring locals to sign a petition demanding that the post office be preserved. But despite more than 3,000 signatories, local MP Julie Marson has been told it will close anyway.

The Conservative MP for Hertford and Stortford says: ‘The Post Office filled the void left by the closure of the banks – and I strongly condemn this kick in the teeth to the residents.’

Ware, with a population of 19,000, is in shock over the imminent closure of the post office

Ware, with a population of 19,000, is in shock over the imminent closure of the post office

Ware, with a population of 19,000, is in shock over the imminent closure of the post office

Two of the five postal counters at the back of the Martin’s kiosk on the main street are open. The walls are clad in red and silver tinsel in preparation for a Christmas rush – but there’s little celebratory cheer from staff who fear they’ll be out of work in the new year. Afton French, a 37-year-old mother of six, says: ‘What if the post office closes? scream? It’s such a lifeline for people like me who rely on the vital service it provides to the community.”

Afton uses the post office to top up the cover card for her electricity meter.

Sue Marx, 67, says: ‘The post office and the banks need to be beaten together by the government to sort out this terrible mess.

“The elderly and vulnerable who rely on face-to-face banking services are being abandoned. They don’t want to bank online. As a loyal Lloyds customer I feel betrayed.’

Across the street from the doomed post office is the Sparkles of Ware clothing store. Owner Wendy Smith says: ‘Post offices in nearby villages have closed in recent years, forcing more people to rely on the branch at Martin’s in town.

“Trade suffered when the banks all shut down. Now that the post office is going, it’s only going to get worse. That makes running a company like ours extremely challenging.’

On Friday, MP Julie Marson said she was “hopeful” a new home for a post office could be found in Ware.

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