Royal Mail rations stamps

Royal Mail's price rises have sparked a run on stamps. Is small business leading the charge?

by Dave Waller
Last Updated: 29 Jun 2012
Royal Mail is rationing retailers' purchase of stamps, as punters send themselves to the shops to get their supplies in before the prices go up on 30 April. While the organization is calling it a 'prudent and appropriate' policy designed to 'protect revenue', it can't really be surprised at all the hoarding.

The Royal Mail has capped supplies of stamps this month to 20% of a retailer's annual allocation. It's not surprising then that some shops have now run out. Superdrug said it had reached its limit earlier this week, and would not be supplied with any more until the end of the month ­ when the price rises come in.

With use of postal services dropping among regular folk ­ Ofcom reckons the average family now spends less than 50p a week on postal services ­ we can surmise that it's largely small businesses that'll be stockpiling the most. Most businesses still rely on Royal Mail for deliveries and, amid all the other current cost pressures, none wants its postage bill going up 30%. When first class stamps suddenly leap from 46p to a whopping 60p, second-class up to 50p, and the cost of packages are sent even higher, any business that still uses the traditional method as key to its communications may be tempted to push the envelope and seek out a plan B.

Of course that's not really the point as far as Royal Mail¹s concerned. When you're an organization running a loss-making universal service, you need to make it pay somehow, and so you want your revenue-generating reforms to work. But most of your customers are going to struggle to see it from that point of view, as Ian Murray, the shadow postal affairs minister, suggested when told the Telegraph it was 'shameless profiteering at the public's expense.'

The rise is the biggest annual increase in stamp price in percentage terms since 1975. Only 10 years ago, a first-class stamp cost 27p, and a second-class cost 19p. Come April 30 that'll go up to 60p and 50p respectively.

So how should small businesses best counter this? Metered mail is cheaper (and handy for avoiding costs of underpaying for postage too, which is up to 80p per item, plus the amount that the post was short by). They could also switch to second class. Then there are other more radical options, like dumping the post altogether and going electronic. As business is starting to find, when it comes to the bulk of your communications, new technologies really can deliver...

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