Royal Mail has defended the stamp price increases that have received so much publicity in recent weeks, pointing out that the new 50p second class rate will still be the lowest in Europe. The price of first class stamps has rocketed by 30 per cent, from 46p to 60p, while the price of second class stamps has increased from 36p to 50p.
A recent survey of 1,000 small and medium-sized businesses carried out by Pitney Bowes found that four out of five businesses felt that today’s postal rate change will have a negative impact on their company. Of those questioned, 7 per cent say that they fear their business may not survive the threat. Almost half said they will be sending less post, or swapping postal communications for email, while 15% of companies would consider moving to a franking machine to avoid the price hike.
Chief executive of Royal Mail, Moya Greene said the new prices were still “incredible value for money”, with first class stamps about half the cost of posting letters in France and Germany.
A Royal Mail spokesman said: “Raising prices is never easy. It is not a decision we have taken lightly but regretfully we have had no choice but to do so. We have thought very carefully about the impact on our customers and on our own business.”
“Royal Mail has made a loss in its core mail business, including packets, of almost £1bn over the last four financial years. That is not a sustainable position for any business.” Deliveries have been declining by about 5% per year although e-commerce has driven growth in packet delivery services.
With such a lot of choice of communications channels available to small businesses, the price increase does not spell disaster. Phil Hutchinson, marketing director of Pitney Bowes UK says “Successful customer communications depend on a delicate balance of message, medium and timing. Although digital communications undoubtedly have their place, traditional print campaigns are still critical for most businesses and are likely to remain so for many years to come.”