The largest retail branch network in Europe is not Tesco, Carrefour or Marks & Spencer.
The humble British Post Office has about as many branches as all of them put together, with most people living within one mile of a branch.
The government's protective instinct was evident when the annual £150m subsidy to help rural branches stay open was extended from 2008 to 2011
Only around 550 of the 14,500 branches are managed directly by Post Office Ltd. The remainder are run by subpostmasters/mistresses — private business people who often also run a retail business, such as a stationers or newsagents, on the same premises.
There were 25,000 post offices in the 1960s and this number has been in steady decline ever since, culminating in the government’s announcement in 2006 that 2,500 branches — a fifth of the network — would close by 2009. Although that move sparked an outcry there were sound financial reasons behind it.
Rural decline
Many of the losses are expected to be in rural areas, unsurprising given that rural post offices are threatened by the same socioeconomic problems that are making some other rural businesses unviable: low incomes, a declining population and a seasonally variable population thanks to the preponderance of second homes.
Also, many of the services traditionally on offer at post offices can now be found online, thus negating the need for people to leave the house. Four million fewer customers use post offices each week compared to a year ago and the network as a whole is haemorrhaging £4m a week.
Nevertheless, there is clearly support for the Post Office network in the media and in politics, with many acutely aware that post offices are a crucial lifeline for vulnerable people across the country, as well as a well-respected provider of essential services for the general population. Opposition politicians, newspapers and lobby groups such as the National Federation of SubPostmasters (NFSP) are likely to ensure that government support for the remaining post offices, particularly in rural areas, continues for a while yet.
This protective instinct was evident when, to soften the blow of the closure announcements, the annual £150m subsidy to help rural branches stay open was extended from 2008 to 2011. This will help the government continue to meet its goal of having 90% of the population within three miles of a branch, or six miles for those living in remote areas.
The government’s determined reorganisation of the Post Office at least shows an acknowledgment that it needs to adapt, something also demonstrated by a recent deal with BT to offer broadband. And the company, despite its troubles, still sells more foreign currency than any other retailer, and is the third largest provider of travel insurance in the UK.
