Business Irish

Thursday 26 April 2018

Revealed: How post offices plan to 'restructure' to remain 'relevant'

An Post’s proposed strategy moving forward involves splitting the company into two distinct business units dealing with mail and retail. Stock photo
An Post’s proposed strategy moving forward involves splitting the company into two distinct business units dealing with mail and retail. Stock photo
Kevin Doyle

Kevin Doyle

Post offices are to develop a wider range of financial and banking services in a bid to remain relevant in the internet era.

As he confirmed a €30m lifeline to rural post offices, Communications Minister Denis Naughten said there was an expectation that An Post would use the money to "restructure and modernise" the network.

The minister said that post offices could replace "lost services previously available from the banking sector".

"In addition, a new initiative called 'Digital Assist' will use the local post office as a digital gateway for Government business," Mr Naughten said.

The loan to An Post, first revealed in yesterday's Irish Independent, has been welcomed by both the company and the Irish Postmasters' Union (IPU).

It had been predicted that up to 400 post offices would close in the next four years, but this figure is now likely to be revised down.

However, Mr Naughten warned: "There is no doubt that difficult decisions lie ahead but the reality is that without immediate action we could lose our national postal service. Doing nothing jeopardises the very survival of our national postal service and I am not prepared to let that happen."

An Post welcomed the loan facility, saying significant actions had already been taken by the company this year to resolve the financial situation.

The company incurred a loss of €15.6m in 2016 and this time last year PwC forecast a loss of €61m in 2017 if no action was taken. However, An Post is on course to break even this year.

These actions included:

  • Increasing prices for mail services;
  • The re-launch and re-specification of the parcels business with evening and Saturday deliveries;
  • A reduction in staff numbers by 317.

An Post's proposed strategy moving forward involves splitting the company into two distinct business units dealing with mail and retail.

CEO David McRedmond said: "The company is facing into extraordinary challenges, but by working collaboratively with all stakeholders including Government, unions and staff, we have already achieved a very significant turnaround in 2017.

"Much work remains to be done, but with continued momentum and Government support, we will see the development of two great companies, An Post Mails and Parcels and An Post Retail in the years ahead."

Postmasters said the fresh investment would help to keep post offices open.

IPU general secretary Ned O'Hara said it had been a long and difficult journey for postmasters who had continually highlighted their social and community importance and carried strong public support.

"What is important is that a significant portion of this money goes to protecting and securing the post office network and does not get consumed in addressing other problems faced by An Post," he said.

"Postmasters will now focus on working with the minister and An Post to translate the investment into tangible benefits for post offices as quickly as possible."

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business