The Post Office has revealed an emergency Hardship Payments Scheme has been launched to protect stores that have had their travel product sales decimated by the pandemic.
From July to October, Post Office retailers with more than 10% or £5,000 of their remuneration in 2019/2020 will now be guaranteed 50% of their 2019 commission, with the Post Office making ‘top-up’ payments to reach this level.
Speaking to RN, Post Office chief executive Nick Read said the move was necessary to keep some branches open, with a surprisingly large share of its 11,500 branches relying on travel products for at least 10% of their income. “For some branches, 30-50% is travel based. That’s not a great balance but they’ve built their business off the back of our travel business,” he said.
The company told betterRetailing sales of insurance, foreign currency, and travel ID services were still down by 86% on the same point in 2019. “we’re simply not getting the level of demand we require even in Euros and Dollars. We saw green shoots six weeks ago, it picked up for two or three weeks then it’s been very slow ever since,” explained Read.
Discussing the top-up payments, the chief executive added: “It’s similar to last year’s hardship fund, the same principles apply. We wanted post offices to stay open, remuneration to be fair and appropriate and for those postmasters to be able to stay open. But due to the pandemic they weren’t getting the level of remuneration they deserve, so we needed to find a way to top it up. It’s the same with this scheme.”
Out of the Post Office’s 11,500 branches, 7,000 provide 60 currencies on pre-order. Nearly all sites sell travel insurance products.
The renewed subsidies for struggling stores come amid renewed debate around postmaster remuneration. Despite the average subpostmaster remuneration rising 16% since 2018, Spar Scotland withdrew dozens of Post Office branches from its stores earlier this year, describing the service as not financially viable. Despite offering new trial formats to Spar Scotland operators CJ Lang in attempt to keep them onboard, the firm continued with its decision to axe local Post Office branches. In a wide-ranging interview to be published in RN magazine on 23 July, Nick Read reveals his response and outlines support from other major retailers for the Post Office model following CJ Lang’s move.
In the interview, the chief executive also provides an update on settlements to subpostmasters related to the Horizon historic shortfalls scheme, shared concerns over the Department for Work and Pensions’ upcoming benefits payments changes, reveals new details on trials underway to add Post Office services on Payzone devices and outlines the push for better remuneration for subpostmasters as part of ongoing negotiations with banks and the Government.
Describing his overarching goal applied to the issues above, Read told betterRetailing: “This is a consumer-facing organisation and we need to start thinking like a retailer. Yes we are government owned, Yes we need to be self-sustaining and yes we have a clear social obligation but it’s about getting [the Post Office] to recognise we’re here to support subpostmasters, and to help them to support customers.”