beorhthelm
A. Virgo, Football Genius
- Jul 21, 2003
- 35,800
enormous fixed costs, legislation to maintain expensive services, meanwhile ever decreasing market. prices or subsidies have to rise to cover the gap.
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[News] First Class Stamp.
- Thread starter Leekbrookgull
- Start date
Peacehaven Wild Kids
Well-known member
Let me get this straight, Royal Mail are going to reduce the one million pounds they are losing a day by encouraging people to use their services by increasing the price by 70% since 2021?
John Byrnes Mullet
Global Circumnavigator
You have to blame the politicians. If the public service had never been privatised then we would still be paying under a pound. But private companies have to make a profit hence you pay £1.65 for next day delivery which being honest is not a bad price for any address in the UK.
Any address in the UK? Dream on!
Guy Fawkes
The voice of treason
- Sep 29, 2007
- 8,271
Do overheads like staffing costs suddenly decrease when less is send? (X number of staff contracted X number of hours a week) - remembering that they tend to have fixed routes to deliver on, and will still need to carry out that route if they have 4 letters a house, or 1 letter every 4 houses.Usual crass corporate logic - fewer people are buying our product or service, so let's increase the price to increase our revenue and restore profitability
Meanwhile last year, the Royal Mail CEO was paid £540,000 salary & £140,000 bonus.
Typical Privatistion = worse employment conditions and practices for the workers, higher prices and poorer level of service for the public as customers, but the usual generous salaries and bonuses for the bosses who preside over this shambles.
Staff will also still want a pay rise each year, to help cover their own increased costs of living which they face? even though they are being asked to deliver less, so less opportunity to recover that extra cost and keep that cost low by spreading it across far more items, due to a drop in use of that service. (ie £10 over 1,000 letters = 1p a letter, but if that was only over 200 letters, that becomes 5p a letter)
Will other fixed business costs that they have to deal with too. suddenly decrease due to a drop in volume? for example, would building costs decrease when less is sent? (lighting, heating, etc) which again would have to be spread over far fewer items.
If income drops because they sell fewer stamps to pay for it, and they still have all those overheads to meet? how do you propose they cover it without a price increase? especially in this case, where the alternative is far cheaper and far quicker than Royal Mail could ever deliver (e-mail, Whatsapp, and other instant / social messenger services. Online services like banking, insurance (viewing documents online rather than having hard copies sent out to individuals) and so on
Posties have suffered worsening terms and conditions of employment in recent years (the usual Orwellian mantra of 'increased flexibility' and 'modernisation'), increased performance targets, and cuts to their occupational pensions.
Not aware of any corresponding reductions to the salaries and bonuses of senior Royal Mail bosses, or dividends paid to corporate shareholders.
But to your main point that if their operating costs remain the same or increase, but revenues/profits are falling due to greater competion, they have no choice but to raise their prices - then even more customers will be lost, leading to further losses of revenue.
Surely in a competitive market, the response to losing customers should either be to cut prices, to attract them back and also court new customers away from your rivals, and thereby increase aggregate revenue income, or/and improve the quality of service, not keep cutting it.
I thought this was how the free market was supposed to work; if demand for a product or service diminishes, then the price needs to fall to a level that enough customers are willing to pay. Supply and demand.
beorhthelm
A. Virgo, Football Genius
- Jul 21, 2003
- 35,800
last dividend was 13p in 2022. nothing last year, a nominal 2p this year.
logical but simplisitic, you could cut price if you can also cut costs too. that means fewer deliveries, reduce staffing, other efficiencies and cost cutting. as apparently they cant do these things, they have to go the other way on price.
and if mail was half the price who is going to think about sending more letters? their market is screwed by technology and changes in behaviour.
boik
Well-known member
You can't encourage demand for a service that people no longer want. There probably isn't a low price that would encourage people to traipse to the post office for stamps and then to the post box, rather than sit on their arses and click a button.
Hampster Gull
Well-known member
- Dec 22, 2010
- 13,465
Hi HWT.
The Post Office is still government owned, Royal Mail was privatised 10 years ago.
You're right re notice of expiry however old stamps can be swapped for new ones. Form online or at a Post Office branch, free to post.
Just had a delivery of over a week's post which included some birthday vouchers and a new debit card after HSBC (hacking some bùgger's card) damaged it in their cash machine. Sounded like a bomb coming through the door with all the leaflets and flyers as well. The postman is polite enough but this is the first post received for a long time.
I have an awful feeling I might get a fine through the post after maybe going through a red light a few days ago. Just hope it's a small amount (which gives me a couple of weeks to pay for it to be halved) and no points on my licence.
I have an awful feeling I might get a fine through the post after maybe going through a red light a few days ago. Just hope it's a small amount (which gives me a couple of weeks to pay for it to be halved) and no points on my licence.
You could always take the letter there yourself?I wonder why people have stopped sending letters at 1.35 pounds for a stamp
And they think putting the price up will help
See how far your £1.35 train ticket gets you
Hampster Gull
Well-known member
- Dec 22, 2010
- 13,465
Hi. You can't price compete with emails, texts, messages in the letters market. The price is different as its physical. Volume declines are a global issue and the way to take price pressure off a relatively fixed cost business in a declining market is to change the service spec which is what the alternate day no Satuday for second class mail is trying to do. It's not 'bleeding edge', is already in place in Scandinavia, Italy, France, New Zealand etc.
herecomesaregular
We're in the pipe, 5 by 5
Of course it does. Membership isn’t free .
Nor is it always next day, on many items now.
- Jul 10, 2003
- 27,320
Tom Hark Preston Park
Will Post For Cash
- Jul 6, 2003
- 71,874
A post office queue is the worst queue in the world. It was, is, and doubtless always will be, a slow form of death
Usual crass corporate logic - fewer people are buying our product or service, so let's increase the price to increase our revenue and restore profitability
Meanwhile last year, the Royal Mail CEO was paid £540,000 salary & £140,000 bonus.
Typical Privatistion = worse employment conditions and practices for the workers, higher prices and poorer level of service for the public as customers, but the usual generous salaries and bonuses for the bosses who preside over this shambles.
Level of service is fine here. No decline.
Since EBay traders took over.
fly high
Well-known member
The post office hasn't been privatised, it's Royal Mail which was sold off, they make the deliveries & dictate the price.
There was a long period when there were notifications that stamps without QR code were no longer valid, it was even extended 6 moths. Could send these freepost to RM & they sent you replacement new ones, easy.