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The average Payzone site being given Post Office (PO) Drop & Collect parcel services is only a 15-minute walk from an existing Post Office branch, sparking concerns from existing branches.
Analysis by Better Retailing shows consultations on 83 PO Drop & Collect branches have been added, updated or proposed since the start of June. The PO confirmed 345 Drop and Collect sites are currently live, with 57 opening since the 1 June. Drop & Collect allows Payzone shops to provide prepaid Royal Mail parcel services previously exclusive to PO branches.
While popular with those offering the service, full PO retailers expressed concerns that the model would cannibalise their sales. At the time, the Post Office pledged it would balance protecting existing branches with the need to for a bigger network to compete with rival parcel services, such as CollectPlus and Evri.
Mapping of the 87 Drop & Collect consultations by Better Retailing revealed the average distance from an existing Post Office is just 0.7 miles, while 20% of the new sites are half a mile or less from an existing Post Office, according to data from Google Maps and the Post Office’s own branch locator. The figures suggest there is a customer base overlap between many of the existing and new sites.
The Post Office strongly contested Better Retailing’s findings, stating the ‘minimum criteria’ for a new Drop & Collect site was for it to be at least 0.5 miles from an existing Post Office.
The firm highlighted that one of the four branches analysed by Better Retailing as being under 0.5miles away from an existing site related to bringing ‘extra capacity’ to a town that had recently seen its only Post Office replaced with a temporary ‘Post Office on Wheels.’
Even some of the one in six Drop & Collect sites more than a mile away from an existing post office are providing challenges, according to Anusha Rajani. A Payzone-partnered store 1.2 miles away from her Manor Way Post Office in Borehamwood, Hertfordshire, was added to the PO Drop & Collect network. The retailer told Better Retailing: “I’m angry, to be honest, and yes we have noticed the difference. We are no longer the closest branch for the customers closest to that new site, so we do lose those sales.
“The Post Office says it’s minimal, but the footfall supports the additional shop sales. It all adds up. Perhaps we got five visitors before, but now we get three and the other site gets two. It’s the same sales for the Post Office, but less for every branch.”
A Post Office spokesperson responded: “The growth in retailers wanting to operate a Drop & Collect is evidence of the Post Office’s strong brand, and with the competition in the prepaid parcel market being incredibly fierce, retailers are choosing to work with Post Office.
“Any claim that 20% of Drop & Collect branches are within half a mile of an existing Post Office is categorically incorrect. Each Drop & Collect location is carefully chosen, following criteria that it should be 0.5 miles or more from a nearby Post Office and is monitored to ensure that nearby Post Offices are not detrimentally impacted. This new format launched in autumn 2021 and Post Office has, and will continue, to contact all nearby Postmasters within a mile of each Drop & Collect before it opens, providing them with contact details to address any concerns they may have. We also engage closely with the NFSP on the Drop & Collect roll out providing weekly and monthly updates.”
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