Dublin, 16 June 2015
Financial services, social enterprise, public services and white labelling cited as routes to post office survival
Irish post offices can thrive if they diversify into financial services, social enterprise, public service delivery and white labelling, according to an initial report by a business development group led by entrepreneur Bobby Kerr.
The group, whose initial report is published for consultation today (Tuesday), was established by Minister for Communications Alex White, TD, to explore commercial and public service opportunities to secure the future of the post office network.
It found that a disproportionate amount of business is conducted in relatively few of the country's 1,140 post offices. Two thirds of all transactions are conducted in 300 post offices, while another 48% of post offices account for just 12% of total business.
Minister White said: "Changing consumer preferences mean that many consumers don't go to the post office anymore. That means post offices must continue to diversify and modernise to provide the services that will attract customers.
"An Post is a trusted brand and the company has invested heavily in its marketing and retail infrastructure. Despite this, maintaining relevance is a tough challenge. The work of the Business Development Group represents the best opportunity to place the post office network on a sustainable footing into the future."
Minister White said that, despite the challenges faced by post offices, the number of closures has fallen dramatically during the lifetime of this Government. There were 24 net closures of post offices between 2011 and 2014, compared to 198 net closures between 2007 and 2010.
Mr Kerr said the Business Development Group had established work streams to further explore four business areas:
· Financial services: The report says it is essential that An Post develops an increased capability in financial services as the main banks are withdrawing from rural Ireland. An Post is working on an e-payments account, similar to a bank account, which it believes could deliver the necessary electronic payments infrastructure to meet the future needs of the Department of Social Protection.
· Government services: An enhanced role for post offices in the delivery of government services "is logical and could greatly improve the service delivered to those living outside of urban areas," according to the report. The group will explore the possibility of post offices delivering services like motor tax, the electoral register, HSE payments, local authority payments and CAO and examination fees.
· Social capital and enterprise: Feasible ideas for social capital and enterprise, to enhance the rural post office's role as a "key social connection" will be identified and costed in the final Business Development Group report.
· White labelling: 'White label' products could "drive footfall to post offices where other services can be cross-sold," the report says.
In the forward to the report, Bobby Kerr writes: "I believe that An Post is best placed to provide a customer-led solution for a host of financial and government-related services right across the country. The Group has identified significant opportunities and we are now moving to a new phase where the feasibility and viability of each new proposed product and service will be evaluated before we make a final report later in the year."
Notes to editors
The Post Office Network Business Development Group was established by Minister Alex White in February 2015. The Group's membership includes the Irish Postmasters Union (IPU) An Post, and ministers of state Ann Phelan and Joe McHugh. Its independent chair Bobby Kerr brings a wealth of business experience of knowledge to the Group, which will make its final report to Minister White in the autumn. Its terms of reference are:
· To examine the potential from existing and new Government and commercial business that could be transacted through the post office network.
· To identify the new business opportunities for the post office network, taking account of international experience.
· To engage as necessary with the public sector, commercial bodies and other interested parties in pursuit of the above objectives
· To prepare an interim and final report for the Minister in accordance with an agreed timetable.
An Post has the largest retail presence in the country with 1,140 active company and contractor-operated post offices and 128 postal agents. 65% of the post offices are located in rural areas thus bringing important services to local communities. The Post Office network is hugely reliant upon two contracts – the Department of Social Protection and NTMA savings.
The consultation on the Business Development Group's interim report runs from 16th June to 28th July.
The full text of the report is available here.