The Post Office (PO) is forecasting increased profits, despite chief executive Nick Read admitting around half of branches are making less than £5,000 in profit per year.
Responding to questions from MPs at a business, energy and industrial strategy committee last week, Read revealed a 26% drop in branch sales in December, but still pledged “we will make a trading profit bigger than we made in the previous two years”. He added the success was driven by sales online, rather than in branch.
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Despite pledging to use the online profits to “support our postmasters”, he later warned: “Potentially 50% of the PO estate is earning and generating less than £5,000 of profit. On energy alone… they are likely to see an increase of between £6,000 and £8,000 this year.”
Read said increased branch closures were likely. “The turnover of subpostmasters is surprisingly low, [but] we think that’s something that will become more difficult as the year progresses,” he added.
A PO spokesperson told Better Retailing postmasters building the PO brand were responsible for the online success, adding: “We are currently exploring ways to ensure that online profitability is more broadly shared. We will also continue to press government for greater energy support.”
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