Smiths News is to shut down its Pass My Parcel service after announcing a “very disappointing” financial performance.

Newly-released results predicted that Pass My Parcel would make an even larger loss than last year due to decreased margins. Smiths News said it would “wind down its associated network of local retailers”.

Revenues at the company’s B2B delivery service, Tuffnells, dived 12.3% and is now also predicted to make a second consecutive loss. Its core early distribution arm, including news wholesaling, also suffered a £30m revenue drop.

East Lothian store owner Ferhan Ashiq stands to lose the 15 customers who set foot in store each day for Pass My Parcel services. He said: “The results show there’s a danger of news wholesale collapse that would severely harm all involved. Publishers may not want to step in but if they don’t, they will be next.”

John Vine from NewsWorld in Church Stretton said the company’s financial performance is relative to the level of customer service retailers receive. “If their customer service was a 10 two years ago, it’d be a two now,” he added.

As a result of the poor results, CEO Mark Cashmore is to step down after nearly 12 years in charge. Chief Financial Officer David Bauernfeind left “with immediate effect” and was replaced by former Yodel CFO Tony Grace.

Asked what his advice would be for the incoming CEO and CFO, Vine said: “Sort out the customer service. If I lose money, Smiths loses money.

“Retailers and wholesalers working together is the only way to turn the company’s fortunes around.”

Pass My Parcel launched in 2014 to bring a click & collect service to independents.