Post Office cuts branch pay on Royal Mail services, blaming competition from PayPoint

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https://www.betterretailing.com/po-cuts-royal-mail-pay/

The Post Office has slashed branch pay for providing some Royal Mail services, blaming the cuts on pressure from rivals including PayPoint.

Messages from PO to shop owners, shared with Better Retailing, state that the PO has signed “a new commercial deal with Royal Mail”, which cuts pay per item for PO branches.

Despite the pressure this will place on already struggling PO branches, PO sought to defend the deal by claiming that Royal Mail’s previous pay per item to PO was “twice the market rate.”

PO defends pay cuts
PO said this is incentivising Royal Mail to push volumes to cheaper networks, such us Royal Mail’s recently launched 8,500-strong Royal Mail Shop network built in partnership with PO “direct competitor” PayPoint.

Post Office chief revenue officer Dominic Grounsell told branches: “The choice was simple: adapt and compete for future growth, or stand still and watch parcel volumes gradually migrate to lower-cost networks.”

The PO claimed that increased parcel volumes and “operational improvements” would “offset much of the impact”, but retailers reacted with anger at the prospect of doing more work for less pay.

Retailer anger
A statement from Voice of the Postmaster (VOTP), shared with Better Retailing, said branches were seeing a “starkly different” reality to the “positive picture presented by PO.” The group also claimed commissions on Evri parcel services and foreign exchange transactions have also been cut in the last two months.

VOTP stated: “These largely unpublicised changes are expected to cost branches hundreds of pounds every month, further squeezing already fragile businesses.” The group went on to attack the PO for failing to involve postmasters in negotiations, and challenged PO executives to accept pay cuts equal to those facing branch owners.

What the deal means for stores
The PO’s new Royal Mail deals sees pay rates falling from 35p to 32p on Tracked Parcel Acceptance, from 14.5p to 2.5p on Labels to Go, from 39.5p to 30p on Local Collect and from 35p to 32p on Home Shopping Items.

The only pay increase is on Tracked Large Letters, previously not paid and now paying 15p per item.

PO’s statement to branches said the new agreement includes a target for a 40% increase in the volume of Royal Mail parcels going through PO branches.

The new Royal Mail deal will also make parcels “easier and faster” for branches, according to PO. This is through ending weighing and sizing of Royal Mail Tracked parcels, reduced storage time for uncollected parcels from 18 to 10 days and better parcel tracking through the PO website and app.

Funding has also been secured for 1,000 Parcel Drop Boxes – which are currently in pilot. These automate the drop-off process for some parcels. Lockers – already installed in 120 branches, will see “significant expansion”.