Greetings card retailers have urged the communications industry regulator to cut a midweek delivery day rather than Saturday if it must reduce Britain’s letter services, as a consultation on postal reforms closes.
The Greeting Card Association (GCA) has said that stopping delivery of standard letters on Tuesday or Wednesday would be far less damaging than a previously mooted plan to drop Saturday deliveries.
The association was responding to an Ofcom consultation on long-awaited proposals for industry reforms published in January.
Ofcom has published a series of options for the future of the universal service obligation (USO), which requires Royal Mail to deliver countrywide, six days a week for a fixed price. They include cutting the service from six days to five or even three days, with a faster, more expensive option retained to allow next-day deliveries.
The proposals did not specify cutting Saturday deliveries but Royal Mail has long pushed to be allowed to cut Saturdays. The government rejected the proposal last year.
The loss-making company hopes to be able to cut its services to reduce costs, amid a long-term decline in letter volumes.
In her response to the Ofcom consultation, the GCA’s chief executive, Amanda Fergusson, said: “In the unlikely case that the case for cutting a delivery day was proven, our members would prefer this to be Tuesday or Wednesday.”
She said that Saturday deliveries were important to small and medium sized businesses, notably in the run up to seasonal events such as Mother’s Day or Easter, which fall on Sundays.
Fergusson suggested another option could be reducing delivery days but waiving any premium on delivery fees in the week before events such as Mother’s Day to grow letter volumes.
She said: “The proposed changes could wipe hundreds of millions of pounds worth of value from our otherwise stable industry and small businesses on high streets and in back bedrooms up and down the country”.
She added that “the idea of a three-day per week [service] is completely unpalatable to our customers and wider industry”.
On Tuesday, Royal Mail announced that Emma Gilthorpe, the chief operating officer at Heathrow airport, will join Royal Mail in May.
She will report to Martin Seidenberg, who is chief executive of its parent company, International Distributions Services, who has been running Royal Mail on an interim basis since his appointment to the group role last July.
He replaced Simon Thompson, who left after a bruising two-year battle with the postal workers’ union.
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Publishers of weekly magazines have also voiced concerns about the idea of cutting Saturday deliveries. The Professional Publishers Association, which represents magazines from the Radio Times to Farmers Weekly, has argued that their time-sensitive information will be delivered late.
Fergusson said: “We empathise with what we view as entirely legitimate concerns expressed by the periodical publishers (and some advertisers) around the apparent absence of a plan for their industry if Saturdays were lost and believe our proposals offer some mitigation in that regard.”
Businesses have already warned about the impact of rising stamp prices, which increased for the fourth time in two years this week, and urged Ofcom not to allow “panicked” cuts.
The GCA has questioned that size of the cost savings Royal Mail could make if it were to reduce the number of delivery days, noting that it relies on delivering many letters and parcels using the same network.
Ofcom has estimated the savings at £100m-£200m by going from six to five days a week, or £400m-£650m with a cut to three days. Royal Mail has said the latter figure was “a bit toppy” and is expected to publish its own figures, as part of a summary of its consultation submission to Ofcom, on Wednesday morning.
Rishi Sunak has already indicated the government’s opposition to a cut in delivery days, saying it was “absolutely committed to ensuring that [the USO] remains as it is”. However, the issue is more likely to be dealt with by the next government after the general election.
Ofcom is expected to continue to discuss the proposals with industry after the end of the consultation, and publish an update in the summer.
