Royal Mail limits supply of stamps ahead of price rise

[POSTMAN]

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Royal Mail is limiting the number of stamps it supplies to retailers now to ensure it profits from record price rises later this month.

Some of the biggest high street chains and post offices said on Thursday that they were running out of stamps as people began stockpiling them.

Royal Mail confirmed on Thursday that it had imposed a cap on the number of stamps every shop could buy.

Retailers said it was refusing to restock them when they exceeded their allocation.

Ian Murray, the shadow postal affairs minster, said he would write to Ofcom, the postal regulator, urging it to investigate the “shameless profiteering at the public's expense” by Royal Mail.
“The disproportionate rise in the cost of stamps will have a significant impact on small businesses and those on low incomes,” he said.

“It’s understandable that those who will bear the brunt of the increase will want to stock up before the price increase.

“If it is the case that Royal Mail is rationing the supply of stamps before the price increase that would seem to go against the spirit of what Ofcom was trying to do with the deregulation of prices. I shall be writing to Ofcom. For many small businesses and those on low incomes, this disproportionate increase in stamp prices will make a significant difference.”

Adrian Bailey, the Labour chairman of the Commons business, innovation and skills committee, said the restrictions were “absolutely outrageous”.

“To restrict the number of stamps the retailers can get seems to me to be a restriction of trade,” he said.

Last month Royal Mail announced that the price of first-class stamps would rise by 30 per cent from 46p to 60p from April 30, while the price of second-class stamps would rise by 39 per cent from 36p to 50p. Royal Mail has capped supplies before the price rise to 20 per cent of each retailer’s annual allocation.

A spokesman for the company said: “We do have limits on the amounts that individual retailers can pre-order in advance of the price rise. These limits are in place for all retailers so we can balance customer demand with the need to protect Royal Mail’s revenues.”

Retailers said they had seen a five-fold rise in sales as people stocked up on stamps at the cheaper price.

Ocado, the online supermarket, ran out of stamps entirely earlier this month while Asda, Sainsbury’s and Morrisons all confirmed that demand had risen sharply.

Superdrug said it was running low on supplies and had been told by Royal Mail it would not get any more stamps until April 30. The company has called on Royal Mail to lift its restrictions so it can “help customers save money”.

Post offices are also running low on supplies. The office in Shere, a village of about 1,000 people near Guildford, Surrey, reported that many customers and small businesses were “panic buying” before the price rise.

Most were stockpiling to ensure they had enough stamps at the current price, said Michael Deacon, the assistant postmaster. It had run out of first-class stamps while the level of second-class stamps was low.

Mr Deacon said one small business owner spent £230 on five 100-stamp booklets while dozens of others were buying “one to two hundreds at a time”.

“We have sold thousands of stamps,” he said. “I would say it is panic buying, definitely, and many are telling me that they are stockpiling.” People on eBay, the internet auction website, were profiting from the price rise.

A sheet of 100 first-class stamps was selling on the auction website for £50, a £4 premium on their face value. When prices rise, the sheet will be worth £60.

Small businesses have been buying before the price rise. David Powell, a director at the consultancy Auditel, said he bought 3,000 stamps online this week – enough to last for two years. “I’ve just saved £430,” he said.

Martin Lewis, of the consumer website Moneysavingexpert.com, said the rush for stamps was “completely unprecedented in my memory”.

He said: “People are stockpiling. Loads of people are buying over £500 worth of stamps for all sorts of reasons. Some are buying them ahead of their weddings next year and some are buying them to sell.”

A Royal Mail spokesman denied that stamps were being rationed but admitted supplies were being “limited”.

“There is no shortage of stamps,” he said.

“Therefore, by definition there is no rationing. Companies only ration if there is a genuine shortage, which is not the case. We have more than adequate stock in place to meet customer demand.”

The spokesman said Royal Mail would “continue to discuss” stamp supplies with any retail chain “that feels it requires more stamps to meet any real customer demand”.

A spokesman for the Communication Workers Union, which represents many post masters, said: “It’s inevitable that stamp price rises would lead to an increase in stamp sales before it comes into effect.”

[POSTMAN]

A Royal Mail stampede should not stop the price of stamps from rising.

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In the age of email, texts, social networks and the rest, it is hard to justify any taxpayer subsidy for Royal Mail's letters delivery business.

Like the rest of Royal Mail it must stand on its own two feet. Your local, friendly postie has to be paid for. It's this fact of life that's behind the decision by Ofcom to allow Royal Mail to increase the price of stamps - a decision which comes into effect on April 30.

Quite rightly Ofcom still insists on the Royal Mail's universal service obligation to deliver overnight to 29m addresses six days a week. But there's a cost to that and those who use it should pay it. Those who choose not to, shouldn't.

The main objection to putting a price on letters is that those without digital alternatives - often the elderly - have no choice and so are disadvantaged. But in a country celebrating longevity, even if we're struggling to pay for it, such arguments are becoming, well, old hat. My septugenarian parents have taken to email. It can be done.

The fact some retailers and Royal Mail customers are stockpiling stamps ahead of the next price rise is no reason not to raise prices. The stampede is purely a function of Ofcom's rather perverse requirement that Royal Mail gives a month's notice of price changes. Why not a week, or a day? It's simply an invitation to buy now while stocks last. The Royal Mail needs time to adjust its own systems but surely most of that can be done behind closed doors before an announcement is made.

Anyway, the Royal Mail is not being nationalised, it's being privatised - and not a moment too soon. Alongside that it needs regulations that will allow it to compete. Progress has been made but, on the evidence of today, the rules and regs still need modernising just like Royal Mail's letters business.

[johno47]

The price rise is a massive PR blunder to add to a list of blunders made by people at the top of this business since we were given commercial freedom in 1997, put the price of stamps up but not by this ridicules ammount, all you are doing is forcing households and small business to use email and other forms of communication, why not put up the DSA price which we all know is far to low, after all the business mail was used to subsidise the cost of the stamp for customers, until the Labour goverment stabbed us in the back and opened up our postal market so that companies could cream off our proffits for doing bugger all, and then this stupid farce of not allowing people to buy as many stamps as they want.
Once again we have another idiot in charge of this business, someone whos thinking about how she can increase her bonus ready for when she sods off in 5 years time.