Local but limited?
Will Post Office Locals meet consumers' needs?
Andy Burrows and Claire McAnulty
About Consumer Focus
Consumer Focus is the statutory
consumer champion for England, Wales,
Scotland and (for postal consumers)
Northern Ireland.
We operate across the whole of the
economy, persuading businesses,
public services and policy-makers to put
consumers at the heart of what they do.
Consumer Focus tackles the issues
that matter to consumers, and aims to
give people a stronger voice. We don’t
just draw attention to problems – we
work with consumers and with a range
of organisations to champion creative
solutions that make a difference to
consumers’ lives.
Consumer Focus
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
What we did . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Key findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Context for the pilots and the limits of what we can know .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Product range and use of PO Locals .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Awareness of PO Locals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Opening hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Satisfaction with PO Local attributes .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Banking, Government and future services .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Suitability of premises to offer PO Locals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
How well did POL consult on the implementation of PO Locals? . . . . . . . . . . . . . . . . . . . . . . . . . 38
Conclusions and next steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Annex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Local but limited?
Introduction
The Post Office network faces significant
restructuring in the next few years. One in six
post offices and one in five sub post offices
will be converted into a totally new operating
model – Post Office Local (PO Local). For
millions of consumers, this means their
local post office serivce will undergo major
changes. As part of the restructuring, many
existing post offices will close, and services
will transfer into nearby shops, petrol
stations or other existing retail facilities.
As the statutory watchdog for post office
consumers, Consumer Focus is committed
to ensuring the restructure programme
works for consumers and is driven by their
needs. Before PO Locals (previously referred
to as Post Office Essentials) are introduced,
the operating model must be shown to be
capable of delivering effective, customerdriven service. PO Locals should contribute
towards securing a sustainable, long-term
future for our Post Office network.
What's happening
In November 2010, the Government announced
that 2,000 sub post offices, typically in suburban
and rural parts of the UK, would be converted
to the PO Locals model1. The PO Local model
represents a fundamental shift in how post office
services are provided: from the traditional sub
post office model, in which post office services
are offered by subpostmasters, as the primary
function, to post office services being provided
as a secondary function in shops such as
convenience stores, petrol stations, newsagents
and potentially even supermarkets.
PO Locals typically offer a reduced range of post
office products – but are often open for longer
hours. Services are provided from the main retail
counter, not a separate post office area, and
transactions are undertaken by retail employees,
rather than dedicated post office staff.
Understandably many consumers may find it
surprising that Government has announced
another restructure of the Post Office network
– the third in only eight years. However, in its
recent policy statement, Government concluded
this latest restructure programme offers ‘the only
realistic prospect of maintaining a post office for
thousands of communities across the country’2.
BIS (2010) Securing the Post Office Network in the digital
age. November 2010
2
Ibis
1
4
Consumer Focus
It is therefore highly likely that, over time, many
additional locations will see the introduction of PO
Locals, as part of a wider strategic shift away from
the sub post office model. This forms part of the
Government’s strategy to allow the Post Office
network to operate on a more cost-effective basis
in future.
It is important to stress the restructure
programme does not require outright closures
– in fact, the Government has explicitly ruled
out a further closure programme – but the
scale of the challenge for Post Office Ltd (POL)
in implementing these changes should not
be underestimated. This new research, which
assesses customer satisfaction in areas where
the Locals model has already been piloted, finds
that PO Locals could play a constructive role in
securing the future of the network – but only if
POL commits to improvements to the operating
model, and to implementing PO Locals effectively.
Summary of key findings
It is clear that, before any roll-out can take place,
the Locals model requires further work to ensure
it is capable of meeting consumers’ needs. The
next 12 months will be crucial – and even then,
local implementation will be key. Pilots typically
took place in areas without a post office, or where
the previous post office had been closed for an
extended period. As such, any lessons from the
pilots will need to be applied with caution.
While consumers are likely to welcome
the convenience and extended opening
hours provided by PO Locals, without clear
improvements to the in-branch experience, some
consumers will be likely to perceive the shift in
provision negatively. The operating model cannot
be considered robust until we see demonstrable
improvements to the quality of service; enhanced
levels of staff knowledge and expertise;
modifications to branch and counter layouts,
including steps to address widespread concerns
regarding customer privacy; and measures to
ensure the full range of products and services are
consistently and reliably available.
In particular, our research has found worrying
evidence of examples of cash and benefit
withdrawals being capped; temporary breaks
in service because there are not always trained
staff on hand to serve at the counter; and the
inconsistent provision of parcel services, which in
many instances seems to vary from one PO Local
to the next.
Local but limited?
5
POL should undertake a detailed review of its
product range, including the piloting of products
which are currently excluded from the PO Locals
product offer. When the wider roll-out takes place,
POL should only exclude a product or service if
there is demonstrable evidence it is unsuitable to
be offered from a PO Locals branch.
The introduction of PO Locals will be a period of
critical transformation for post office customers
– and looks set to happen at precisely the time
that POL faces a number of significant changes to
its ownership structure, its business model, and
unprecedented challenges to some of its major
revenue streams.
Looking ahead to the wider roll-out, it will be
important that POL delivers a model that is
capable of meeting consumers’ needs – both
now and in the future. It is therefore critical that
PO Locals are designed to offer a full range of
everyday banking transactions, and that premises
are only selected that can effectively service the
growing and potentially lucrative market for parcel
drop-off and collection. Given the increasing
competition in this market, this is not only about
meeting consumer needs, it is also a commercial
necessity.
Based on our experience and handling of previous
restructure programmes, we have clear concerns
that, without strong consumer representation
'hardwired' into the process, POL will be poorly
equipped to implement changes in the consumer
interest. This risks unplanned and unmanaged
migration to other post offices that may be ill
prepared and potentially unable to cope.
Although the substantive roll-out of PO Locals is
still some time away, it is increasingly clear that
the challenges associated with implementing this
restructure programme will be as significant, if
not more challenging, than previous restructure
exercises. The challenge for both POL and
Government will be to ensure that the PO Local
model is sufficiently robust for a wider roll-out, and
that the restructure programme is implemented in
a consistent and consumer-oriented way.
6
PO Locals have clear potential to modernise
the network, and to protect post office
services. However, POL needs to get the
design and implementation process right,
because the risks associated with the
restructure are clear.
Millions of consumers wait to see whether
POL delivers a post office service that makes
the network fit for the future, and that meets
their needs. For post office consumers the
stakes could, arguably, not be higher.
Consumer Focus
What we did
Consumer Focus commissioned Ipsos MORI to
undertake quantitative and qualitative research in
45 locations where PO Locals have been piloted.
The objectives of the research were to:
●● report on whether the PO Local model
represents an effective means of providing
post office services to consumers
●● determine consumer satisfaction in the areas
where PO Locals have been piloted
●● identify any improvements that may be
required to the operating model and ensure a
good customer experience
●● make recommendations on the suitability
of PO Locals to offer post office services to
consumers
●● provide evidence to Government and POL to
ensure the model is rolled out in a way that
benefits consumers, and is geared towards
their needs
A face-to-face survey of 1,003 adults was
undertaken, with the sample drawn from residents
living in the catchment areas for PO Local
branches. The sample comprised both users
and non-users of the PO Local, and non-users
were asked whether they used post offices in
other locations. Surveys were only undertaken in
areas where the PO Local had been open for a
minimum of three months3 .
Six focus groups were held with users in
England, Scotland, Wales and Northern Ireland.
The locations were selected to provide a
range of customer experiences, and reflected
PO Locals that were operating out of shops,
convenience stores, a pharmacy and a cafe.
Attendees reflected a range of socio-economic
characteristics.
The fieldwork was carried out during September
and October 2010.
As a limited number of PO Locals in Scotland, Wales and
Northern Ireland were eligible for inclusion in the research,
we will be looking to closely scrutinise the roll-out in
devolved contexts as the pilot period continues
3
Local but limited?
7
Key findings
Context for the pilots and the limits of what we can know
It appears that the PO Local model is
capable of meeting consumers’ needs – but
the case is still to be made.
Most of the PO Local pilots have been positively
received. But it is important to remember most
of these branches replaced long-term closures,
plugged gaps in service provision, or in some
cases were introduced in locations that did not
have a post office previously.
The context in which Locals have been piloted
(‘saved from closure’, ‘better than nothing’) is
therefore likely to differ considerably from changes
that take place as part of a major restructure
programme. During such a restructure exercise, it
is likely many consumers may perceive the shift to
PO Local, or aspects thereof, as a downgrade of
service: with a reduced product range, changes
to the quality of service, and in many cases the
closure of the previous sub post office they know
and trust4.
Both POL and Government should therefore
recognise the limits of what we can learn from
the pilot exercise. In areas where a popular sub
post office is to be closed and replaced by a PO
Local, POL should be careful to recognise that the
reactions of consumers may be very different from,
and perhaps more negative than, the experience in
pilot locations. In pilot locations, consumers often
thought they had lost post office services altogether
and therefore tended to respond as follows:
Consumer Focus research suggests that 3.5 million people
signed petitions in response to the proposed closure
of sub post offices during the last closure programme,
which powerfully demonstrates the strength of consumer
attachment to sub post offices. Consumer Focus (2009)
How was it for you? Consumer engagement in the post
office closure programme
4
8
Consumer Focus
‘It’s better than not having one’
‘I’d like to have more services, but that doesn’t
seem likely, does it?’
‘I’m really glad the post office is open again...
I missed it an awful lot’
Consumer satisfaction, which initially appears
superficially high, needs to be interpreted against
the context of consumers typically having been
without local post office services for an extended
period – and therefore being primarily grateful that
an alternative means of post office provision is
now in place. In many locations, it appears that
consumers are consciously willing to accept a PO
Local – even with a restricted product range – if
the choice is between having a Locals branch or
no local post office at all5.
Indeed, it is striking that many consumers report
they would like to see improvements to service
standards and the range of products on offer, and
also identify failings in the quality of service they
receive, but:
‘I don’t want to complain in case they close it’
‘You don’t want to say too much [about its
shortcomings] they might close it. I don’t
want it closed’
The retention of a local post office is clearly a
critical driver in shaping consumers’ views about
PO Locals – and indeed in framing consumer
responses to post office services generally.
Existing PO Locals appear to have been well
received because they score strongly on the
attributes that consumers value most. For
example, 63 per cent state convenience is one
of the most important attributes of post office
services, and 91 per cent say the convenience of
the PO Local premises is fairly good or very good
in this respect.
However, it is not possible to know whether PO
Locals will be as strongly received in areas where
post office services are already in operation – and
therefore the shift to a PO Local is in effect a
‘straight swap’. Many consumers will inevitably
not attach the same significance to PO Locals as
we have seen in pilot locations – welcoming it as a
means to retain local provision – when in effect the
opening of the PO Local means the community
loses a sub post office branch which they already
felt effectively met their needs.
As such, the lessons from the Locals pilots will
need to be applied with considerable caution: the
early evidence shows PO Locals display some
positive characteristics, but before the model can
be assessed as robust, significant improvements
to the model appear necessary.
‘I’d forgive them a lot because of the sheer
convenience of it’
Among users of the PO Local, 75 per cent agree they
would prefer a ‘local outlet offering longer opening hours
but fewer services’ as opposed to a ‘a main PO further
away with full services and standard opening hours’. Nonusers were more evenly split: 45 per cent expressed a
preference for the PO Local, but 47 per cent disagreed
5
Local but limited?
9
Product range and use of PO Locals
If it means that post office services are
restored or retained, consumers in the pilot
locations appear willing to accept a reduced
product range. However, if PO Locals are to
effectively meet consumers’ needs, changes
to the product offer will be needed. POL will
need to demonstrate a greater degree of
flexibility than they have typically done
until now.
Does the product range meet
consumers’ needs?
In the event consumers see their existing
post office directly replaced with a PO
Local, and the range of available services
is therefore reduced, it is likely consumers
will be more dissatisfied with the product
range on offer. This is the context for the
forthcoming roll-out.
Unsurprisingly, as most consumers tend to use
core post office services most of the time, the PO
Local is generally seen to offer most or many of
the services they regularly need:
A significant minority of consumers
frequently use both PO Locals and also main
post offices, because the PO Local has a
restricted product range. This presents major
implications for the restructuring process,
and potentially for the wider network, if the
introduction of PO Local triggers a significant
displacement of customers to the remaining
Post Office network. Some branches may be
poorly equipped or unable to cope with the
customer migration that may follow.
10
The PO Local offers a core range of post office
services, but does not offer DVLA or passport
services, manual bill payment or banking
transactions, on demand foreign exchange, some
international mail services, and in some instances,
parcel services are not being routinely offered.
Consumers are also unable to pay by cheque.
‘The additional services you are only going
to use once or twice a year whereas you are
doing (basic post office) stuff once or twice a
week’
As table 1 demonstrates, 29 per cent say the PO
Local offers all the services they need, 40 per cent
say the PO Local offers most of the services they
require, 16 per cent say they can access at least
some of these services. Only 13 per cent say it
provides little or none of what they need.
Consumer Focus
Table 1 Percentage of PO Local users stating
the extent to which its product range
meets their needs
Offers
%
Users
All the services I require
29
Most of the services I require
40
Some of the services I require
16
A few/hardly any of services I require
13
Table 2 demonstrates the products and services
that users access regularly at a PO Local branch,
and also that they have accessed at least once:
Table 2 Products and services regularly
accessed at a PO Local branch
Product/service
Use
Have
regularly used
(%)
at least
once
(%)
There appears to be high satisfaction among
users of mail and postal services, with 84 per
cent saying the PO Local meets their needs in this
respect – although this drops to only 46 per cent
among non-users.
Buy stamps
66
87
Post packets up to 5kg
39
63
Pay bills
24
37
Special Delivery
17
42
Collect pensions or benefits
16
22
Even though a majority of users report that the
PO Local offers most or some of the products
they need, this doesn’t translate into high levels
of overall satisfaction: only 52 per cent think the
overall product range is good, with 48 per cent
saying they think the product range is at best
average or poor. In the event of a wider roll-out,
it is likely that dissatisfaction with the product
range will be higher than in the pilot locations,
with customers unable to access products and
services that were previously available through
their local sub post office.
International mail to 5kg
12
27
Withdraw cash from ATM
9
20
Account withdrawal or deposit
4
11
What services are not available,
but consumers want?
POL told us that 86 per cent of products are
offered through PO Locals, which equates to
97 per cent of transactions actually undertaken.
However, our research found there is significant
demand for a number of products that are not
currently offered through PO Locals. Many
consumers use other post offices to access these
products and services.
Local but limited?
11
So which services do consumers want?
Unsurprisingly, there is particular demand among
users for DVLA services such as car tax, and
passport services such as renewals, to be offered
through PO Locals (37 per cent). However, many
sub post offices in the area may not have had
these services previously6, and most consumers
accepted they could reasonably use other post
offices to undertake these more infrequent
transactions (in the case of car tax, usually this is
an annual transaction).
It is possible, of course, that some branches
which currently offer passport and DVLA services
could convert to PO Locals, and therefore cease
offering these services in future.
There is strong demand among consumers for
a range of core post office services, which have
not been included in the PO Local product range
up to now: this includes some international mail
services, manual bill payment, manual banking
transactions and retaining the option to pay
by cheque.
‘I had a cheque to cash ... “to get cashed at
any post office”... and they said they can’t do
it. He should have been able to do that’
Table 3 Percentage of service users wanting
additional products and services to be
offered through PO Locals
Product or service
DVLA and passport service
37
Parcels over 6kg
26
On demand foreign currency
22
Insurance products
22
Manual over-the-counter cash
withdrawals and deposits
20
International mail over 6kg
14
Pay by cheque
11
Get a form that is not available
9
Manual bill payment
8
To get foreign currency
6
To withdraw cash
4
PO Local customers who had used alternative
post offices did so to access a range of products
and services that are not currently offered through
PO Locals (see table 4).
Users of PO Locals report they want the following
services, shown in table 3, to be offered:
For example, DVLA services are only offered through 7,500
post offices for contractual reasons
6
12
%
wanting to
be offered
through
PO Local
Consumer Focus
The table shows there is a sizeable minority of
consumers using other post offices for over-thecounter manual bank transactions, on demand
foreign exchange, and critically, larger parcel and
international mail services, which are excluded
from the PO Local product range. In the case of
parcel services, these appear not to be offered
consistently:
Table 4 PO Local users who visited an
alternative post office because a service
was unavailable at the PO Local branch
Base: All users who visited an alternative
post office because a service was
unavailable at the PO Local (413)
%
Passport or driving licence applications
36
Other (mainly car/vehicle/road tax renewals) 25
Insurance (travel, home, car, pet, life)
14
Foreign currency or travellers cheques,
unless pre-ordered
14
Post parcels of 6kg and above
14
Over-the-counter manual banking cash
withdrawals and deposits
9
Use the post office ATM to withdraw or
deposit cash
8
International mail of 5kg and above
8
Parcelforce Worldwide International items
7
Don’t know
6
Payment by cheque
6
Transcash or other manual bill payments
4
Moneygram
3
Local but limited?
13
Parcel services
POL has advised Consumer Focus that Royal
Mail domestic parcel services over 6kg are
now available through the majority of PO Local
branches. This service was introduced during mid
2010. Consumer Focus was not notified of this at
the time of commissioning the survey.
Despite PO Locals now being permitted to offer
domestic parcel services over 6kg, there appears
to be very low awareness among consumers.
26 per cent cited this as a product which they
wanted to access, but which was not available at
their PO Locals branch. Among those who felt the
PO Local offered only some or few of the products
they normally wanted to use, 19 per cent said
they wanted parcels over 6kg to be available. 14
per cent said they had to visit another post office
branch specifically to complete this transaction.
During a recent mystery shopping exercise,
undertaken in January and February 2011,
Consumer Focus was told in response to five
of 11 enquiries that a domestic parcel weighing
over 6kg could not be posted from a PO Local
branch7: the range of explanations included that
the service was not currently available, the parcel
should be taken to a main post office, and in one
instance, that the scales were too small to weigh
the parcel’s dimensions correctly.
We have also spoken to new operators who, in
some instances, were unaware they should be
accepting larger parcel transactions.
In the focus groups, consumers reported:
‘They only do sort of small parcels, they won’t
do anything over 4kg, so I have to be quite
choosy’
‘I remember putting something up on the scale
and she said, no, take it off because I could
have damaged the scale. I find it awkward’
‘I’m quite lucky that the things I send out are
light’
There appears to be a widespread problem with
operators unaware or opting not to offer the
full range of parcel services. As a result, there
is widespread uncertainty among consumers
whether larger parcel services are available.
Consumer Focus envisages that, unless compelling
circumstances are provided to justify exceptions,
every PO Local should offer a full range of parcel
services including and up to the 20kg weight limit
specified by the universal service.
Consumer Focus made a series of telephone-based
enquiries to PO Locals enquiring whether it would be
possible to undertake a parcel transaction over 6kg
7
14
Consumer Focus
How frequently do users visit the PO
Local and other branches?
As table 5 demonstrates, 46 per cent of users visit
the PO Local each week, and 86 per cent use
it at least once each month. 53 per cent of PO
Local users now visit other post office branches
less frequently than before the opening of the PO
Local in their area.
However, the amount of users of PO Locals who
also use other post office branches remains
significant – and surprisingly high:
●● 21 per cent use another post office two or
three times each month
●● 38 per cent use another post office at least
once each month
●● 53 per cent have had to use as an alternative
post office specifically because the PO Local
was unable to offer the product or service they
wanted
Table 5 Frequency of use of PO Locals and
other post offices (PO Local users)
Use
PO
Local
Use other
post office
branches
Every week
46
8
2 or 3 times each month
25
14
Around once a month
14
17
Once each 2–3 months
6
12
4–6 months
3
13
Less regularly
5
36
In the context of the wider roll-out, it therefore
looks like there is a high likelihood that significant
custom will be displaced from PO Local branches
to other post offices in the network. This presents
opportunities for other post offices, which could
become more viable as a result, but there are
also clear risks: for example, that other branches
will not be equipped to cope with additional
customers, and that service standards will fall as
a result. It also makes the restructure programme
more challenging for POL, as it will be necessary
for them to model customer migration by
geography, frequency of visit, and transaction
type, with the risks to the remaining network
exacerbated if this is not undertaken appropriately.
A strategic approach will therefore be needed
to ensure ongoing consumer access, and
also that branches can cope with the potential
for considerable additional demand. In many
respects, the requirements of the PO Local
restructuring will be even more complex
than those of previous closure programmes
– increasing the risks if the restructure is not
handled effectively.
These risks reflect, and are actively compounded
by, the fact that the majority of consumers who
do not use PO Locals (one in four of the local
population) are regular users of post offices
elsewhere. 31 per cent of these had used
another post office in the previous week, and 60
per cent had used a post office in the previous
month (table 6). Many of these consciously opt
not to use the PO Local because of its product
range, customer experience, or a range of
other in-branch concerns (see table 6a). It is
therefore concerning that POL has so far opted
not to undertake research into the needs and
motivations of this important customer group.
Local but limited?
15
Unless POL is more responsive to the needs of
these consumers, and seeks to better understand
the behaviour of its customers more broadly
(including reasons for non-use of PO Locals), any
reshaping of the network risks taking place with a
flawed understanding of its existing and potential
customer base8. The restructure programme
could therefore bring about significant unplanned
upheaval for the remaining local branches. This
includes the potential for significant migration to
other post offices that may be poorly equipped to
cope with the additional custom they are likely to
receive – a development which would be likely to
trigger a network-wide crisis in service standards.
Table 6 Frequency of use of alternative post
offices among non-users of PO Locals
%
Every week
31
Within the past month
29
Within the last 2–3 months
18
4–6 months ago
Less regularly
6
15
Table 6a Reasons for non-users of PO Locals
opting to use other post offices
%
PO Local does not offer services I need
21
Not aware of PO Local
21
Prefer to go to a bigger post office
17
Not near where I work or shop
13
Do not like premises
12
Difficult to park/get to
8
Insufficient privacy
8
Staff not knowledgeable
2
Why do PO Local users visit other
branches in addition to, or instead of,
the PO Local?
It is clear that a significant proportion of customers
who use other post office branches, in addition to
the PO Local, do so because of concerns about
the limited product range available at PO Local
branches: almost one-third of users (29 per cent)
say that, at best, the PO Local offers only some of
the products they regularly use.
The limited product range appears to be a critical
driver in determining consumers’ use of other
post offices, in addition to the PO Local branch,
to access post office services. A small proportion
use other branches because of concerns about
privacy at the PO Local branch, presumably
when undertaking financial or other sensitive
transactions. Clearly some consumers also prefer
to use a post office branch that is closer to where
they work or shop (28 per cent).
We have previously expressed similar concerns regarding
POL’s ineffective handling of its communication and
consultation with consumers during the previous closure
programme. See Consumer Focus (2009) How was it for
you? Consumer engagement in the post office closure
programme
8
16
Consumer Focus
Table 7 Reasons for users of PO Locals visiting
other post offices
%
More services available
40
What I want is not available
29
Near where I work and shop
28
More convenient to use other post offices
10
Need to get a form not available at PO
Local
9
Privacy
6
Better environment/layout
5
Local but limited?
17
Awareness of PO Locals
Most consumers are aware that the PO
Local exists. However, the ‘Locals’ concept
requires further translation, with many
consumers appearing to be unsure of the
extent of the product range it offers, as well
as its opening hours.
Consumer awareness of PO Locals is high,
with 93 per cent of consumers aware that post
office services are available from the premises.
40 per cent of respondents had heard about the
PO Local through visiting the ‘host’ retailer, 29
per cent heard through word-of-mouth, and 28
per cent noticed external branding outside the
retailer’s premises.
Only 9 per cent had heard about the PO Local
through POL’s own promotional activity. This is
consistent with POL’s failure to effectively promote
new approaches to provision in other parts of the
network, and more broadly, the poor approach
to communicating with its customers9. However,
given the generally strong awareness, this is of
less immediate concern than in other segments of
the Post Office network10.
While consumers may understand the PO Local
concept, being familiar with brands such as Tesco
Express and Sainsbury’s Local which have grown
significantly in recent years, this does not mean
they understand the extent of the product range
yet, and more specifically, which products are
included in the PO Local product range (and which
are not):
‘It’s basically a ‘post office express’ –
supposed to be just the basics, but he does
cover nearly everything that the normal post
office does – except car tax and passports’
‘I don’t know what the difference is between
Post Office and Post Office Essentials [Locals].
It does not bother me as long as I send
parcels’
Consumer Focus (2009) How was it for you? Consumer
engagement in the post office closure programme
10
Consumer Focus (2010) Sink or swim: Post Office Outreach
services in the long term
9
18
Consumer Focus
‘You go into the post office, you’ve no idea
what they offer. I know they do stamps, I know
they do parcels, but beyond that I wouldn’t be
able to tell you if they did bills or anything... it’s
not selling to you’
Confusion over the product range extends to
whether a consumer would need to visit a PO
Local or a ‘main’ post office to undertake certain
transactions:
●● three in 10 users did not know whether any
core post office services were available
●● only 44 per cent thought passport applications
would be unavailable
●● just 43 per cent thought the PO Local would
not offer DVLA products, such as car tax
●● A substantial minority incorrectly cited services
as being unavailable when they actually are: for
example, 31 per cent did not think pre-ordered
foreign currency could be purchased
●● A few consumers told us they thought other
services were not available through the branch,
such as withdrawal of pensions and benefits,
international mail, and the payment of gas and
electricity bills
Consumers also told us that it would be helpful
for posters and leaflets to be available at PO Local
branches that clearly set out which products
and services were on offer and, crucially, which
transactions had to be undertaken elsewhere:
‘We’ve no information about what he’s got, what
he’s offering that we can do at a post office’
[Seeing a list of products that are not available]
‘It’s quite interesting, it’s the sort of list that
you’d rather see what they don’t do, because
it sticks in your mind, doesn’t it, as opposed to
what they do do’
Further clarification of the PO Locals concept will
be critical in ensuring that consumers grasp the
extent of the product range and, once changes
take effect, consumers are able to migrate
successfully and without confusion to the PO
Local service. This is particularly important in
the limited number of cases where the existing
sub post office is expected to convert into a PO
Local.
‘And there’s a limited amount regarding the
service you can get there. And people queue,
and they get to the front after say 10 or 15
minutes, and find this service isn’t offered
there. There was one lady who wanted to
forward her mail, she was moving house, so
she waited all that time to be told they don’t
do that service’
Given that both users and non-users tend to
assume that most services will be available in
every post office location, for example domestic
and international parcels to 20kg or bill payment,
if POL is not prepared to amend the product
offer accordingly, it will be necessary for them to
ensure consumers understand both the product
restrictions and what this means in terms of their
everyday use of the Post Office network.
Given the confusion over the product range and
other aspects of the model, in the event of a
roll-out, there will inevitably be a significant lag
time before overall consumer satisfaction can
be determined – with an extended period of
transition for consumers who are directly affected
by changes to their local branch. (See annex for a
list of products and services available through PO
Locals.)
Local but limited?
19
Opening hours
Consumers say they would benefit from
extended opening hours, and there’s
evidence that extended opening hours are
changing consumer behaviour. However,
there is uncertainty among many consumers
whether every PO Local actually opens for
longer – meaning POL is failing to capitalise
on one of the model’s core strengths.
PO Local branches are designed to offer longer
opening hours: initial findings from POL suggest
that, on average, each pilot location provides
post office services for an extra six hours each
day compared to a standard sub post office11.
Many PO Locals open evenings and weekends.
Unsurprisingly, the majority of consumers are
strongly in favour of extended opening hours:
75 per cent of PO Local users say that longer
opening hours will be useful for them.
‘I’ve never heard of another post office that
offers these hours – so that is very good.
I got cash out on a Sunday!’
‘It’s handy for people working nine to five
Monday to Friday – it’s handy if you can use it
after hours’
‘It’s good that it’s open that bit later’
It appears that the additional flexibility offered by
the longer opening hours is not only welcome,
it is changing how and when consumers use
post offices. Two in five users (38 per cent) say
they have already used the post office during
the extended opening hours, with almost threequarters of these saying they specifically used
this branch because of its longer hours.
BIS (2010) Securing the Post Office Network in the digital
age
11
20
Consumer Focus
During the extended opening hours, use of PO
Locals is disproportionately higher among those in
employment, and among consumers aged 16–44:
precisely those consumers who may find it difficult
to use post offices during standard opening
hours, and who may otherwise have undertaken
transactions by other means. 45 per cent of those
in employment have used the post office at least
once during the longer opening hours, as have 46
per cent of people aged 16–44.
However, there appears to be considerable
uncertainty among many consumers about the
opening times of the premises from which post
office services are offered and, consequentially,
whether the PO Local itself actually opens longer
hours. Among users of the PO Local, only 42 per
cent were aware the PO Local was actually open
for longer. 40 per cent of consumers thought
their local branch only opened similar hours to
standard post offices, 12 per cent of consumers
did not know whether the opening hours were
longer or shorter, and in 6 per cent of cases,
they thought the PO Local was actually open for
shorter hours than a standard post office.
This suggests that, in locations where PO Locals
are actually open for longer hours, POL is failing to
effectively promote the enhanced flexibility on offer
– and as such, to capitalise fully on the additional
convenience this offers to consumers. According
to the research, opening hours are the second
most important attribute, after convenience, in
determining whether and how often consumers
use post offices: 39 per cent state opening hours
are one of the main three reasons that determine
their use of a post office branch.
Among existing users of the PO Local, 83 per
cent say the opening hours of the Locals branch
are good. However, our focus groups indicate
that in a number of locations, branches are prone
to unexpected closures or breaks in service, for
example because core staff are on leave, off sick,
taking breaks, or because the demands of the
associated retail business are required to take
priority. See page 27 for more detail.
Local but limited?
21
Satisfaction with PO Local attributes
Consumers report strong dissatisfaction
with a range of in-branch measures,
including privacy, layout, queuing, and the
knowledge and expertise of counter staff.
There are also reports some services,
including cash withdrawal, are not always
available. This risks particular detriment
to vulnerable consumers, including
pensioners and those on benefits.
Without significant improvements to
in-branch customer measures, many
consumers are likely to perceive the shift
to a PO Local as a downgrade of service.
POL and Government should therefore
prioritise measures to improve the
consumer experience.
Are consumers satisfied with PO
Local attributes?
It appears that many consumers welcome PO
Locals because they are convenient and often
open longer than standard post office branches.
As table 8 demonstrates, consumers attach
particular value to these attributes when using
post office services in general:
Table 8 Most important attributes for PO Local
users, when using post office services
in general
Most important attributes for PO Local
users, when using post office services in
general (choose 2 or 3)
%
Convenience of location
63
Opening hours
36
Product range
31
Quality of service
30
Ease of access
29
Knowledge of post office services
22
Queuing
21
Privacy at counter
19
Suitability and layout
13
Unsurprisingly, the convenience of having a
local branch carries a particular resonance in
pilot locations, most of which had previously
experienced a long-term break in post office
provision:
‘I’m really pleased with it because while we
did not have a post office in... we had to go to
[another branch]... And you nearly queued to
the door. I was delighted that the post office
opened again here’
‘We’ve done without for a number of years and
I’m grateful to have it back again’
22
Consumer Focus
However, while PO Locals typically score good or
very good ratings against a number of attributes,
satisfaction tails away on in-branch measures (see
table 9), including suitability of premises, queuing,
layout, product range and, most strikingly,
customer privacy.
It’s particularly noticeable that nearly 40 per
cent of users suggest the overall experience is
at best only average compared to an alternative
branch. For one in six consumers (16 per cent),
the overall experience is poor – meaning that for
these consumers, it is likely PO Locals represent a
downgrade or deterioration of services.
This suggests that although consumers value
the PO Locals, principally because it offers them
continuing proximity to post office services, there
are numerous aspects of the customer experience
where POL should strive to significantly improve
the consumer experience before the model is
appropriate for further roll-out.
Table 9: customer satisfaction scores for PO Local attributes
Very/
fairly
good
Average
Very/
fairly
poor
Average or
very/fairly
poor
Base: All users
%
%
%
%
The convenience of the location
91
6
3
9
Opening hours
83
12
3
15
How easy to access the counter
79
10
11
26
The quality of customer service at the counter
77
14
9
23
The assistant’s knowledge of post office services
69
18
10
28
Suitability of the premises for post office services
67
16
17
33
Whether or not you have to queue
66
25
8
33
The layout of the premises
62
18
20
38
The overall experience compared with any alternative
post office you use
61
22
16
38
The range of post office services available
52
24
20
44
Privacy
36
21
43
64
Local but limited?
23
The importance of in-branch
measures
Which aspects of the in-branch
experience require improvement?
Consumers’ use of PO Locals will inevitably be
driven, in the first instance, by the convenience
and opening hours of these branches. However,
in the context of the forthcoming restructure
programme, there is a clear risk that without
improvements to the in-branch experience, many
consumers may perceive the shift to a PO Local
negatively.
Before the PO Local is suitable for a wider rollout, significant improvements are needed to
some key aspects of the model and the customer
experience it offers. The poor ratings for inbranch measures need to be addressed through
a combination of refinements to the operating
model, and through improvements to service
standards in the pilot locations.
This is particularly the case when the capacity
of and willingness among consumers to accept
trade-offs in order to retain post office services
will be far lower, because they already have a
valued local sub post office in their area. In the
pilots, consumers have reported they have been
prepared to put up with a suboptimal model, or
aspects of customer service, because ultimately
this was preferable to not having a post office at
all.
Consumer Focus could only be satisfied that the
model is robust once these changes have been
successfully implemented.
As participants have told us:
‘As long as we can go and get our money out
and get stamps and that – I’m happy’
‘It’s better than not having one’
‘If there was no post office around it would be
dreadful – you won’t be able to go nowhere
then’
It is important to stress that it is concerning
that some of these issues have emerged so
prominently during the pilot stage, when we
would have reasonably expected close scrutiny
of the pilots. Clearly, POL has been seeking to
demonstrate the potential of the Locals model,
including for consumers, throughout the pilot
period.
It is therefore important that, in the coming
months, POL demonstrates a renewed emphasis
on improving the customer service and experience
in PO Locals. As the relevant statutory consumer
body, we envisage working closely with POL to
secure the following necessary changes.
‘I’d like the additional services, but not if it
meant shortening the hours’
'Yeah, it’s okay if there are wee issues [so long
as] they are not severe enough that they would
say hang on let’s close it’
24
Consumer Focus
Space and layout
As focus group participants told us:
When asked to score against a graded scale,
38 per cent of service users rated the space
and layout of PO Locals as average or poor,
with 20 per cent scoring branches as poor or
very poor in this respect. Perhaps unsurprisingly,
some customers tend to view the Local branch
negatively when compared with existing sub post
offices. Customers reported that because the host
convenience stores or other premises were quite
small, adding a post office counter to an already
confined space increased the feeling of being
cramped.
‘There is just an aisle, there is too many
people. You’re down that aisle and people are
out shopping so they’re squeezing past you’
‘They wouldn’t get in, anybody in a wheelchair,
they’ve no facilities whatsoever’
In many locations, the congested layout appears
to be a noticeable problem, because post office
services are offered from the main retail counter,
which creates queues; and in some premises,
because there is confusion over where to queue
for which service. POL should therefore work
closely with operators to ensure the optimal layout
of the premises, including the location of the
counter, and to ensure that consumers can move
freely and easily throughout the store.
‘It needs a proper counter and I don’t think
the shop is big enough for both the shop and
post office’
‘It needs to improve the space available for
the post office side of the shop – I do not like
having the food counter right next to post
office services’
‘Everything – the counter is in the wrong
place – it’s right by the door and stops other
customers getting in. Those in the queue are
pushed and shoved by people trying to get
past’
‘The layout is too congested – you don’t know
if you’re waiting for the post office or shop’
When some consumers described their ideal
layout, it was the standard sub post office model
– with post office services typically offered from
the back of the shop, in dedicated areas, and
with more waiting space than the PO Local
currently offers. At the very least, consumers want
other service users to ‘stand back a wee bit’ or
approach the counter one at a time.
POL should therefore develop and distribute
best practice guidelines for operators. Even
if space constraints will be inevitable in such
premises types, if PO Locals are to be successful,
consumers must feel satisfied with, and easily able
to navigate, the branch layout and environment
they offer.
Local but limited?
25
Privacy
The lack of privacy offered through PO Locals
emerges a major issue for all consumer groups:
43 per cent of customers say the privacy available
to them when undertaking transactions is poor,
and two-thirds (64 per cent) say the privacy
available to them is average at best.
Concerns about privacy, particularly when
undertaking financial or benefits transactions,
stem from the limited retail space available for
queuing, poor branch layouts, and the fact there
tends to be two parallel queues – one for general
retail, and the other for post office transactions.
Multiple customers are often served from the
same retail counter at the same time.
Some respondents told us they had now stopped
using PO Locals because their concerns over
privacy had exceeded the convenience of having
a local branch:
‘I’ve stopped using the post office... because
there is no privacy between shop customers
and post office customers’
Other customers continue to use the Local
branch, but have major concerns about the
appropriateness of undertaking post office
transactions in this way. Some cite concerns
about the risks of being robbed, particularly if
the cramped layout means other customers can
hear how much cash they were withdrawing. In
some instances, because the post office counter
is located immediately next to the entrance to the
premises, everyone who enters or leaves the shop
can hear the nature of the transaction that is being
undertaken:
‘The counter is in the wrong place. It is right by
the door so everyone can hear what you are
saying... no privacy and it’s not safe – too easy
to rob’
‘The counter is too small and the privacy level
is terrible’
‘There’s the security... it’s not private at all...
because there’s people standing right behind
you all the time and so many people floating
around’
Some users reported that staff needed to be more
attentive when dealing with high value or financial
transactions, and that sometimes staff had been
inattentive and/or inappropriately indiscreet:
‘Everybody’s on top of you’
‘It’s too close, with people able to just look
over your shoulder at your PIN number’
‘I’ve actually had a woman looking over my
shoulder and I’ve had to tell her to go away’
‘They ask how much you want, you ask for
£200 quietly, then answer back ‘we’ve only
got £100 loudly’
‘Some people don’t want everybody to know
they’re on benefits. It’s privacy, privacy’
26
Consumer Focus
Staff knowledge and experience
28 per cent of service users state the knowledge
and experience of staff to be at best average or
poor, with 10 per cent saying it is very or fairly
poor. The capability and experience of the staff
in PO Locals is reported to be variable, and their
knowledge of post office products and services is
sometimes considered patchy:
‘Some of them are [trained] but some of them
are not... if they’re not going to put more
people [on the counter], because obviously
that’s not cost efficient, they just need to train
each individual, make sure they’re trained’
‘They are going “what do we do?” and looking
at instructions’
‘He’s not got a clue’
‘The post office has been in chaos because
the staff wasn’t trained... it’s not their fault, he
didn’t take any extra staff on’
The quality of service offered in each location is
typically felt to be overly dependent on only one
or two staff members in each branch. If the ‘core’
staff member is absent or busy, this can slow
down transactions and increase queue times:
‘The only one who can run the post office with
her eyes shut is Andrea’
‘The chaos. People taking parcels back and
the staff don’t know how to handle it’
Some users voice concerns over the suitability of
retail staff to be undertaking financial transactions
or those involving high-value items, and reported
that for some high-value transactions or for
Special Delivery services they now used other
post office branches:
‘I would walk to [an alternative post office] to
post a parcel as I don’t feel confident enough
to trust them. They’ve no previous history of
running a post office, they are all very nice and
really helpful... but I don’t feel safe’
‘Are they trained?... They’re working with a
lot more money sometimes. They’re handing
money out. I used to work in a bank, and it’s a
lot different to working in a shop’
‘If I went for stamps I’d go there, but if I’ve
got parcels to post away I wouldn’t post it
there. I’d be terrified of it arriving somewhere
else because they don’t seem to have enough
training to run it the way it should be run’
Most users reported the retail staff in PO Locals
were friendly and welcoming. However, it was
generally felt that in most locations the post office
service was offered as secondary to the existing
retail business. From a consumer perspective,
this contributed to lower service standards than
customers received from dedicated post office
branches, with retail customers often being
prioritised:
‘They pay more attention to the food and stuff’
‘He shouldn’t have a post office... he doesn’t
have a clue’
‘He’s not organised enough... he doesn’t know
what he’s doing’
Local but limited?
27
Many consumers felt that it was the primary
responsibility of POL, not the individual operators,
to be monitoring service standards, ensuring staff
received appropriate training and maintaining
overall standards that were comparable with the
rest of the Post Office network.
Some consumers felt that POL needs to do more
to improve the quality of service in PO Local
branches, citing limited training and low visibility of
POL-led training and support:
‘[Why is it a branch] is not up to standard and
not worthy of having the post office franchise?’
‘The Post Office needs to get behind them and
support them better... train the staff more’
‘[The Post Office] did send someone in there for
a while – to guide them along – but they weren’t
in there long enough were they?’
Unplanned breaks in service
Consumers reported that some PO Locals
unexpectedly stop offering post office services
when, for example, a core staff member is on a
break, during lunchtimes, or other busy periods.
Such examples of service interruption are clearly
unacceptable, and require further investigation
to determine whether this is indicative of broader
problems with the staffing ratios associated with
the Locals model.
‘I went to the post office at five to twelve, and
it was shut they say, twelve to one. I went at
five to twelve and the guy went, “no we’re
shutting down”. I said “no, it’s only five to
twelve”, “you’ll need to come back at one”. I
was there five minutes early and he turned me
back!’
‘Shut for stocktaking, it’s another excuse, they
shut for stocktaking which is ridiculous’
‘There’s no consistency’
‘I’ve been through the week a few times, and
it’s just had a little clipboard with red writing
on it saying post office closed for dinner. So
sometimes I’ve been through the week, and
I’ve been there, got there at 12.05 and they
say they’re on dinner till 1 o clock, you have to
come back. It’s a pain in the backside really’
28
Consumer Focus
It is clearly the case that consumers should expect
reliable service and consistent opening hours,
and that these should be well communicated.
The inconsistency of service reported in some
locations is not only inconvenient for consumers,
it will also negate some of the convenience
generated by these branches typically being open
for longer periods.
In one case, the opening hours were a particular
cause for concern, with the branch being
reported by users to keep erratic and unreliable
opening hours – opening late, closing for ‘lunch’
at various times, and sometimes closing all day
unexpectedly:
‘Sometimes you go in and it’s not open; it’s
not open the hours it should be open... I don’t
bother anymore and go to [an alternative post
office]’
‘Anytime you go up – all you see is a sign
saying ‘closed for lunch’
‘He shuts and never told anybody’
‘Meant to open half past eight but doesn’t
open til half past nine’
Queues
33 per cent of PO Local users report that their
experience of queues at the branch is either
average or poor (25 per cent say it is average, 8
per cent say it is poor). This refers to wait times,
but crucially, also to the interplay between the
queuing arrangements for the post office and
separate retail transactions, which appear to be
a greater concern to consumers than the actual
time taken to be served. It appears that queues
can build up if the main staff member is not
available, if the post office transaction is difficult
to undertake, or because of poor retail standards.
It is also possible that limited awareness of the
extended opening hours means the benefits
of potential queue smoothing have not been
realised.
In some of the pilots, consumers reported they
had been made to wait to undertake a post office
transaction until the appropriate member of staff
was available, and that in some instances, they
had been made to wait until the staff member
returned from their break, or finished other duties.
Many consumers report they find the queuing
systems for the post office and retail side of the
business ineffective:
‘You have to queue up again and it’s so
narrow, and as I say, there is one line and there
is two tills on it, one to deal with them [retail
consumers] and one for the post office, it’s not
convenient for elderly people or anybody else’
‘If there’s a long queue obviously they’re going
to serve people [making retail purchases] first,
and then you’re waiting, and then somebody
else is stood right behind you when you’re trying
to do something, and you feel a bit intimidated
that they’re right behind you, especially, as you
say, you’re drawing money out’
Local but limited?
29
In a number of locations, consumers reported
they felt uncomfortable if they were seen to be
‘holding up the queue’, for example, because
they had a lengthy or complex transaction to
undertake. Some consumers reported they had
to wait to be served until the retail queue had
been served, and that sometimes the retail trade
seemed to take priority over customers wanting to
undertake post office transactions:
‘Let’s say, I’ll go in with five or six parcels ...
and you feel like you’re holding the queue up’
‘[The staff] said okay can you hang on a wee
second, because it was going to take a lot
longer to post a parcel than it was to take for
bread. So even though I was in the shop first
[I had to wait to be served]. I didn’t mind but
some people would’
POL should work with its operators to ensure
staffing is appropriately aligned to the busiest
periods. Some consumers felt that offering
post office services has increased the amount
of custom to the store – but that without a
proportionate increase in staff, this had led to
increased queuing times:
‘It can get very busy, just one person serving
two queues and juggling two tills – and the
lottery slows things down’
Queue times seem to be more unpredictable than
in standard sub post offices: this is because the
waiting time will be determined by a wider range
of factors, including but not limited to:
●● the ability of staff to undertake a range of post
office transactions
●● customer visits being undertaken at different
times of day
●● varying retail standards of each PO Local
The successful implementation of the PO Local
model will be contingent on POL’s ability to
address a number of issues, including: its ability
to successfully model its customers’ behaviour
(including likely migration levels from closing sub
post offices to the PO Local); anticipating the
appropriate alignment of staff against periods of
predicated and actual customer demand; and a
willingness from POL to be responsive and make
changes to the staffing of the branch, and the
wider operation of the model, as may be necessary.
It would also be desirable for POL to commit to
better ongoing training and support, so staff can
deal with transactions and queries more effectively
and efficiently (for example, not having to call a
telephone helpline while customers build up).
It is inevitable that staff training will be an
important prerequisite for the successful roll-out
of the model, in particular because part-time retail
staff are likely to play a significant role in offering
post office services, in convenience stores, during
evenings and weekends. Given the high turnover
rate associated with such staff, and in order
to ensure queues are minimised while service
standards are consistently maintained, there is
likely to be a need for ongoing POL-led training
and support.
●● the number of staff
●● allocation of staff between the retail and post
office side of the business
30
Consumer Focus
Capping of cash and benefits
withdrawals
‘They keep running out of money’
We have strong concerns that, in a number of
focus groups, customers told us that cash and
benefit withdrawals had been capped to prevent
the branch from running out of cash. The fact
this has been reported across multiple locations
indicates this may be the result of a systemic
failure – and therefore requires urgent attention.
Consumers tell us the PO Local can run out of
money altogether, or alternatively introduces a
‘capping’ system to ensure the retail side of the
business maintains sufficient cash. This could
produce significant detriment for vulnerable
consumers, including pension and benefit
recipients, who rely on the PO Local to make
frequent withdrawals using their Post Office Card
Account (POCA)12. Other consumers are also
affected, including consumers wishing to make
withdrawals using a Post Office or High Street
bank account.
‘Shut for stocktaking. They shut for stocktaking
because they’ve got no money to do the post
office, that’s why...’
‘You’ve got your money and your benefits, and
you say, “right I’d like £200”, “well we’ve only
got £50”.’
‘She always asks “how much do you want?”
And it seems to be a bit of a struggle.
Depends how late you go in the day because I
think they probably run out quick time’
Some consumers tell us they now use the PO
Local only to take out sufficient cash to travel to
other post offices:
‘I use it everyday, but I don’t get a lot of money
out because they’ve never got no money in the
post office. I just withdraw enough to get me
home, then I have to go and use another post
office, to withdraw my money out to go home
or shopping’
‘I went in one day, and all they had was £20’
‘And they’ve got no money, so you’ve got to
go down to...’
POCA users tend to frequently withdraw small amounts
of cash from the post office, which is typical budgeting
behaviour for many low-income and consumers without
bank accounts. Consumer Focus (2010) Opportunity
knocks: Banking solutions for low-income consumers at the
Post Office
12
Local but limited?
31
The cash shortages are of particular concern,
because this may be suggestive of deeper
problems with the operating model. Unlike other
post offices, most PO Locals rely solely on the
cashflow from the host premises – that is to say,
POL does not make regular cash deliveries to
these branches. POL can therefore achieve cost
savings as a result13.
It will be critical to determine whether this
issue is indeed suggestive of a wider problem
with the operating model. This is necessary to
eliminate the potential for detriment in existing
PO Local branches, and more widely, to be able
to demonstrate to customers and stakeholders
that the operating model is robust, and one upon
which they can rely.
However, it appears this model may not work
in some PO Locals settings: as a result, some
branches may have opted to implement cash
capping solutions, rather than request additional
cash deliveries from POL.
Consumer Focus considers that the PO Local
model should not be rolled out further until this
critical issue has been substantively addressed.
POL will need to urgently investigate this
matter, and assess why this service failure was
neither reported by its operators, nor emerged
as a finding in its own internal monitoring or
commissioned research.
POL makes regular deliveries of cash and stock to the
majority of post office branches, but the PO Local model
is being piloted to assess whether these branches can
operate without such deliveries. This would enable POL
to reduce its network operating costs. Of the £44.6 million
estimated savings secured by the last closure programme,
one third (£15.6 million) was expected to be generated by
the allocation of efficiency savings associated with branch
closures (excluding subpostmaster remuneration). This
includes costs associated with making cash deliveries to
branches. National Audit Office (2010) BERR’S oversight of
the post office network change programme
13
32
Consumer Focus
Banking, Government and future services
The PO Local pilots raise questions about
the Post Office’s ability to capitalise fully
on the roll-out of future services, including
banking products, Government services and
the increase in the parcel pick-up market,
which are critical to the long-term viability of
the Post Office network.
POL needs to ensure that the PO Local model is
not only capable of meeting the needs of existing
consumers, but can also meet their needs in
future. This is particularly important given the
Government has signalled PO Locals are set to
‘become the mainstay’ of the neighbourhood
Post Office network14– in other words, it seems
inevitable many more communities, beyond the
initial 2,000, will see their sub post office become
a Locals branch as part of POL’s long-term plans.
It is clearly important that POL’s commercial
strategy is positioned to return the network to
profitability – It should also ensure the Post Office
is fully capable of being able to exploit significant
future revenue streams including: transactional
banking services; the extension of Government
services15; and given the explosive growth of
fulfilment mail, including internet transactions16, to
enable consumers to send and collect parcels and
packages at a time and location that is convenient
and meets their needs.
BIS (2010) Securing the Post Office Network in the digital age
Government has announced its intention for the PO to
become the ‘front office’ for Government services, which
would see consumers able to access a wider range of faceto-face transactional services through POs
16
43 per cent of residents expect to be doing more shopping
online for goods that are sent by post in three years’
time. Consumer Focus and Postcomm (2010) Residential
customer needs from a sustainable universal postal service
in the UK
14
15
Local but limited?
33
Consumer Focus is concerned that PO Locals,
as they are currently designed, may potentially
constrain opportunities for post offices to exploit
these future revenue streams. Unless the Post
Office commits to changes in the operating
model, the long-term viability of the network
risks being weakened, not strengthened, by the
introduction of the PO Local model.
Financial services: Without necessary changes,
PO Locals raise major questions about the
potential roll-out and take-up of financial services
through the Post Office: 49 per cent of users, and
56 per cent of non-users, consider the PO Local
to be unsuitable premises to offer additional cash
and banking services. These concerns are of
particular importance given the scope for the Post
Office to become a ‘neighbourhood bank’; the
Government’s push for banks to allow universal
access to current accounts over post office
counters; and the Post Office’s announcement
that it intends to introduce a current account
when ‘market conditions allow’17.
Both Government and POL will therefore need to
be mindful that, as they push in the direction of
additional banking services being made available
through post offices, the take-up of such services is
not undermined by a restructuring that leaves many
consumers unwilling or reluctant to access these
services through PO Locals, even if they are able to
do so.
In the focus groups, consumers expressed a
range of concerns regarding the suitability of PO
Locals to offer banking services:
‘The privacy [needs improving if I’m to use
services again] there is always people standing
right behind you when you put your PIN
number in’
‘I don’t like people seeing how much I’m
taking out, so they don’t see how much money
I have on me. I don’t like people to overhear
my business or see my PIN number’
‘I’ve stopped using it... because there’s no
privacy’
Parcel drop-off and pick-up: Given that
consumers appear to attach greatest value to the
convenience and opening hours of the post office,
the roll-out of the PO Local model also offers
considerable opportunities for the Post Office
network to capitalise on the dramatic growth of
fulfilment mail (including the delivery of goods and
services ordered online)18.
Consumer Focus and Postcomm (2010) Residential
customer needs from a sustainable universal postal service
in the UK
18
BIS (2010) Post Office banking: Government response to
consultation
17
34
Consumer Focus
PO Locals are clearly well placed to meet the
growing demand among consumers for more
convenient options to drop off and pick up
parcels, at a time and location that is most
convenient for them19. However, if PO Local is
expanded on the basis it cannot offer certain
parcel or larger packets services, presumably
because of space restrictions in certain branches,
this would be a major missed opportunity to
position the post office in this expanding, although
increasingly competitive20, market.
‘I wanted to get something delivered where
the postman left a card. That was before we
moved into where we are now, they’d left a
card and you have to go to the Post Office to
get it. And it wasn’t possible to get it delivered
to this post office, they didn’t recognise it’
Parcel pick-up services should form part of the
standard product offer at PO Locals, but if POL is
to be able to capitalise on this area more broadly,
there will be other issues which also need to be
overcome. (For example, despite the relative
convenience of post offices compared to sorting
offices, only 6 per cent of consumers sampled in
recent Consumer Focus/Postcomm research2 1
had opted for a parcel to be delivered to a post
office, if it couldn’t be delivered first time around.
This is presumably because of the £1.50 cost
associated with this service. This compares to
65 per cent who had opted to collect the parcel
from a sorting office, which does not attract a
handling fee, even though they are often further
away and can be relatively inaccessible to some
consumers.)
POL should ensure that only premises that have
sufficient space and staff to offer the full range
of parcel services, including parcel drop off and
collection, are eligible to offer PO Local services
as part of the forthcoming restructure programme.
POL will also need to ensure PO Locals
consistently offer the full range of parcel services
they are supposed to.
Reasons why residents who receive ‘Sorry you were out’
cards do not pick up their items from an enquiry office
include inconvenient location and opening hours. Consumer
Focus and Postcomm (2010) Residential customer needs
from a sustainable universal postal service in the UK
20
For example, the Collect+ network allows consumers to
send and receive parcels through a growing network of
3,500 outlets, with opening hours that typically mirror those
of the ‘host’ convenience stores
19
Consumer Focus and Postcomm (2010) Residential
customer needs from a sustainable universal postal service
in the UK
21
Local but limited?
35
Suitability of premises to offer PO Locals
Consumers express a clear preference for
PO Locals to be offered from conventional
retail premises – as such, existing
and potential retail operators are key
stakeholders in securing an effective roll-out
PO Local users were asked to identify which
premises they considered to be most and least
appropriate to host post office services, including
banking and financial transactions:
Table 10 PO Local user views on most and least
suitable premises to host branches
Base: All users
Most
Least
suitable suitable
%
%
Convenience store/corner
shop/newsagents
58
6
Stores such Martins,
Costcutter or the Co-op
39
5
Stores such as Tesco
Express or Sainsbury’s
Local
54
6
Pharmacies
12
28
Petrol stations
15
36
Cafes/fast food outlet/
sandwich shops
4
42
Garden centres
6
40
Pubs
3
79
Other
1
*
13
6
None/don’t know
The results suggest that consumers feel more
comfortable in standard retail settings such
as convenience stores, multiple retailers such
as Martins or the Co-op, and in supermarket
‘express’ chains such as Sainsburys Locals and
Tesco Express. Interestingly, these chains are
expected to grow rapidly in the coming years,
which could potentially increase the range of
premises from which PO Local services can be
offered22.
For example, Morrisons will open a convenience store
network in 2011. Tesco, Sainsburys, M&S and Waitrose
are also reported to be planning further openings in the
convenience store format http://bit.ly/gWo81u
22
36
Consumer Focus
In the focus groups, concerns were expressed
about the suitability of a post office located in
a fast food outlet – was this really a suitable
location to be undertaking complex and high
value transactions? In respect of a PO Local
located in a pharmacy, users of both the post
office and pharmacy side of the business were
worried about the privacy available to them when
undertaking transactions:
As focus group participants told us:
‘I don’t know, it just doesn’t feel right, does
it? If you’re going to do that, you might as
well put it in the chippy down there. You’re
queuing to go to the post office and you’ve
got everyone eating around you, the smell of
food, it just doesn’t seem right’
‘I do like the “two in one”, you can get both
[groceries and post office services] while you
are in the shop’
‘When you are asking for something personal
in the chemist, you’ve got someone next to
you waiting for stamps’
‘It’s a nice combination, you can do your
grocery shopping while you’re there’
‘I find it a bit strange. I go to the pharmacy
because I know their experience will cover
the [health] questions I have, then at the same
time they can get me foreign currency... it’s a
bit too much for my liking that they’re using
the same staff’
‘Putting a post office in a convenience store in
the village is a good idea’
Consumers feel less comfortable with post office
services being offered in pubs, garden centres,
cafes, petrol stations and pharmacies – although
we should remember that in rural areas, Outreach
post offices can work well in more unusual
settings.
Local but limited?
37
How well did POL consult on the implementation of PO Locals?
Consumers tell us they were disappointed
with POL’s consultation on, and
communication of, the introduction of PO
Locals branches.
Unless POL takes these concerns seriously,
the restructure programme will fail to
understand and be responsive to consumer
needs, and could lead to major problems
across the entire Post Office network.
Consumer Focus is disappointed that consumer
feedback on POL’s consultation processes is, yet
again, highly negative. We have been repeatedly
critical of POL’s failure to communicate and
consult effectively with consumers23, as have
several Parliamentary Select Committees24. Unless
POL commits, during the restructure exercise,
to strenuous efforts to engage effectively with its
consumers, the result will be disappointing for
consumers – and will significantly weaken the
long-term viability of PO Local branches.
As a result, some PO Locals may not
effectively meet the needs of the communities
which they serve. Perhaps more worryingly,
ineffective consultations risk producing a flawed
understanding of customer needs which in turn
could result in unplanned migration to, and quality
of service failures in, other parts of the network,
and PO Locals being set up to fail.
The research suggests that few consumers recall
being notified by the Post Office of its existence;
that there was very limited awareness that any
consultation was held; and that a clear majority
feel they did not have enough information about
the PO Local branch before it opened.
For example, Consumer Focus (2010) How was It for
you? Consumer engagement in the post office closure
programme
24
For example, the Public Accounts Committee, in its report
into the handling of the last post office closure programme,
found that ‘an important factor angering local people about
the consultation process was a feeling that whatever they
said, nothing would change, and that the process was a
sham.’ Commons Public Accounts Committee (2009)
Fifty-third report of session: oversight of the Post Office
network change programme
23
38
Consumer Focus
Among users:
●● 56 per cent had not heard anything about the
introduction of the PO Local before it opened,
only 42 per cent had
●● 71 per cent were unaware that a consultation
had taken place
●● 60 per cent felt they had not had enough
information about the PO Local, and only 22
per cent said they had
Among non-users:
●● 75 per cent felt they had not received enough
information
While the majority of consumers would have been
unlikely to object to the proposal, as most PO
Local pilots were plugging long-term gaps in post
office provision, the purpose of the consultation
is far more wide reaching. It is the opportunity
for customers to comment on changes to the
product range, the location and accessibility of
the new premises, and any other aspect of the
proposal which shapes their use of the post office.
In the context of a wider roll-out, effective
engagement will be critical – particularly as:
many customers will see their existing post office
branch relocate; the PO Local is likely to offer a
more limited range of products and services; and
consumers may have particular concerns about
the privacy, suitability or in-branch accessibility
offered by the PO Local.
Effective consultation is not only important
before the proposal goes ahead; unlike previous
restructure exercises, Consumer Focus also sees
the necessity for a formal engagement process
after the service changes take effect. The purpose
of post-implementation engagement would be to
identify improvements to the new arrangements:
including whether adaptations should be made to
the product range, and where possible, the layout
or space available to consumers in the shop (it
would not be designed to consider whether the
original decision to proceed with the conversion
should be reversed).
Consumers cannot be reasonably expected to
offer feedback on these in-branch aspects of a
PO Local – which are disproportionately important
in determining whether the service overall meets
their needs – until they have had a chance to use
it for themselves.
Local but limited?
39
Participants want POL, and possibly others, to
monitor the performance of the PO Local, to
undertake checks on whether the store owner
is providing a satisfactory service, and to see
changes take place if the service is not meeting
their needs:
‘Somebody like yourself, somebody in
authority, just to go up there and stand as
if they’re using the post office here, just to
watch, to see’
‘It’s a wee corner shop, and if people need to,
I mean they would like to know the result of
the post office, how well it’s doing’
Of the few who had received or seen consultation
or promotional materials, the form was sometimes
so poor it wasn’t immediately clear even which
store it was referring to:
‘I think there was a leaflet through the door,
wasn’t there?’
‘There wasn’t much publicising it – but I don’t
think anyone was going to complain’
‘People wouldn’t have picked him as the post
office’
40
Consumer Focus
Looking beyond the existing customer base
It will be particularly important to consider nonusers of the PO Local in the event of a wider rollout. One-fifth of non-users haven’t used the PO
Local because they were unaware of it and when
we asked whether they would use the Local now
they knew more about it, 67 per cent still said they
were not likely to do so.
This suggests there is some engrained resistance
among many non-users of PO Locals to using the
service – although this may, in part, be explained
by the fact non-users have been aware of teething
problems that may not be typical of a future
roll-out.
That said, given that many non-users do in fact
use post offices regularly (21 per cent in the
last week, 29 per cent in the last month), this
could have significant implications in the event
of a future roll-out: the combined effect on the
remaining network of those who opt not to use
PO Locals, and those who cannot undertake
certain transactions there, could lead to a
significant migration to the remaining network.
Although this could prove to be positive,
particularly if it bolsters the viability of the
remaining branches, it also raises significant
concerns whether these post offices will be able
to cope with the additional custom they may get.
The risk is that these branches may be unable to
cope unless the restructure programme is handled
in a strategic way; POL acts in a more responsive
way to customer feedback; and the PO Local
model is effectively refined to reflect the findings of
this research.
POL should urgently undertake research to better
understand the needs of non-users – almost a
quarter of the population living in the pilot areas –
if the PO Locals roll-out is to succeed.
Local but limited?
41
Conclusions and next steps
PO Locals could play a positive part in
stabilising and securing the Post Office
network, but the risks associated with
delivering the restructure are clear. As
Government has signalled that PO Locals will
become the mainstay of the network over
time, the significance of the pilot phase could
not be greater. The roll-out of PO Locals has
the potential to safeguard the network, but
without major improvements to the model,
and an effective implementation process, the
network could also be weakened.
The bulk of the PO Local roll-out starts in 2014,
but the reality is that the success of that roll-out
will be determined by work that is underway now.
We’re already seeing a significant ramp up in the
number of PO Locals. The success of the further,
large-scale roll-out will be shaped by whether POL
seizes the opportunity to deliver improvements
to the PO Local model, and whether POL and
Government design an implementation process
that is genuinely built around the needs of its
consumers.
Additional piloting and improvements
to the model
While we are confident that the PO Local model
can potentially work for consumers, the success
of the roll-out programme will be determined,
in no small part, by POL’s willingness to make
necessary improvements to the product range, inbranch experience, staff knowledge and expertise,
and the availability of core services, including
those dependent on cash availability.
The model cannot be considered robust unless
POL acts to secure significant improvements
against each of these areas.
Consumers’ use of PO Locals will inevitably be
driven, in the first instance, by the convenience
and opening hours of these branches. PO
Locals perform strongly in this respect. However,
in the context of the forthcoming restructure
programme, there is a clear risk that without
improvements to the in-branch experience, some
consumers may perceive the shift to a PO Local
negatively.
42
Consumer Focus
We therefore recommend that POL addresses
the following areas, as a priority, during its piloting
activities over the coming months:
●● A detailed product review: this should
include piloting of products that are currently
excluded from the Locals product offer, and
determine their suitability for inclusion as part
of an expanded product mix
●● Availability of parcel services: there
appears to be considerable uncertainty
among operators about whether they should
be offering the full range of parcel services
and, consequently, among consumers
about whether these services are available.
Consumer Focus considers that every branch
should offer the full range of parcel services,
up to the 20kg weight specified in the USO,
unless there are exceptional reasons that merit
otherwise
●● Modifications to counter and branch
layouts: this should address issues of
privacy, space, accessibility and queuing (this
includes wait times for PO transactions, and
more widely, the interplay between retail and
post office transactions). For each of these
measures, POL should commit to targeted
improvements in customer satisfaction levels,
and should engage with both operators and
consumer bodies in the development of best
practice guidelines
●● Training and staff alignment: further
evaluation is needed to understand the best
way of staffing PO Locals, so that breaks
in service due to the unavailability of trained
staff can be minimised, and to ensure
consistent training and support is available
for staff working on the post office counter.
This will improve consumer confidence in the
knowledge and ability of staff providing post
office services
●● Cash and benefit capping: POL should
determine the extent and causes of the
capping of cash withdrawals and benefit
payments, and should be able to demonstrate
that this issue has been fully resolved, before
we see any further significant increase in the
number of PO Locals
It is critical that POL recognises the importance of
the ongoing pilots, and commits fully to exploiting
the extended pilot period, in order to deliver a
PO Locals model that is genuinely fit for purpose.
A majority of the Locals pilots were centred on
locations where the previous post office had
been closed for an extended period and, as this
research clearly demonstrates, there needs to
be some caution about the representativeness of
the pilot findings against the likely impacts of the
forthcoming roll-out.
It is crucial that POL recognises the importance
of improving in-branch measures in securing
the effectiveness of the wider roll-out. In doing
so, POL should be mindful of attaching undue
significance to the high satisfaction figures
recorded in its own research, which will inevitably
reflect the circumstances in which pilots were
introduced, and may not be an effective indicator
of the areas served by the roll-out.
Local but limited?
43
Building a model which is suitable for
the wider roll-out
Consumer Focus’s priority in the coming months
will be to push the trade-offs inherent in the PO
Local model as far as possible towards the benefit
of consumers, although in doing so, we are also
aware of the cost and operator imperatives that
will inevitably drive the wider roll-out.
A key priority for POL will be to develop a model
that is sufficiently robust that it meets consumers’
needs, but which is also suitably attractive to
multiple operators and other potential providers.
Multiples will play a critical role in ensuring the
model is rolled out in a strategic and efficient
way, and that PO Locals are situated in the most
convenient premises and accessible locations.
At this stage, Consumer Focus is aware that
further work appears to be necessary to ensure
the model is made sufficiently attractive to major
operators. For example, we need to better
understand whether the PO Local model reduces
POL’s operating costs, but risks doing so in an
unsustainable way, through the direct or indirect
transfer of some of these costs to operators.
If this is the case, there is a clear risk that the
model will not be attractive to potential operators,
which in some areas could restrict POL’s options
when the roll-out takes place. Alternatively, POL
could seek to refine the model in order to make
PO Locals more attractive to potential operators.
This could lead to changes to the product range,
opening hours, or queuing times which may or
may not be to the benefit of consumers.
44
Getting the implementation
process right, including effective
representation for consumers
The substantive roll-out of PO Locals is still some
time away, but it is increasingly clear that the
challenges associated with implementing this
restructure programme will be as significant, if
not more challenging, than previous restructure
exercises.
Based on Consumer Focus’s experience and
handling of previous restructure programmes,
there is a clear risk that, without strong consumer
representation 'hardwired' into the process, POL
will be poorly equipped to implement changes
in the consumer interest – potentially leading to
poorly implemented closures, and unplanned and
unmanaged migration to other post offices.
It will be important that Government moves swiftly
to develop its proposals, and that a consistent
approach is applied to each proposal during the
restructure exercise.
At this stage, Consumer Focus proposes
the following principles should inform the
Government’s approach:
●● Effective consumer protection necessitates
scrutiny of the programme and how it
operates, in addition to analysis of specific
proposals
●● Consumer drivers need to be built into POL’s
decision making functions and processes
Consumer Focus
●● Consumer functions require the ear of POL’s
senior management, and the programme
needs to be designed to allow for this – this is
essential to discharge scrutiny of the process
and maintain accountability
●● The design of the programme needs to
consider lessons learned both from previous
restructure programmes, and from ongoing
changes to the Post Office network
Consumer feedback will be critical to ensure
PO Locals are implemented, and subsequently
refined, in a form that ensures they effectively
meet the needs of local communities
This will clearly be a critical 12 months, and it
is essential that the improvements are made
to the operating model where necessary.
If these steps are taken, we are confident
that the benefits of PO Locals can be
unlocked for consumers. However, if
POL fails to capitalise on the extended
pilot period, the restructure process
carries significant, and in some respects,
unprecedented risks. Millions of consumers
will be affected by this transformation of
the Post Office network – it is critical POL
delivers this radical set of changes well.
Local but limited?
45
Annex Annex: Products and services
available through PO Locals
Product/service
Available
Not available
Mail
Domestic letters and stamps

Domestic parcels to 6kg
*
Domestic parcels to 30kg

International letters and priority mail

International parcels over 5kg

Special Delivery and recorded products

Parcelforce
 **
Financial services
Cash deposits and withdrawals (using Chip and PIN)

Cash deposits and withdrawals (manual)

Postal orders

National Savings and Investments
 ***
Post office financial services

Moneygram
 ****
Post office insurance products

Bill payment
Manual bill payment

Energy prepayment and top ups

Automated payments

46
Consumer Focus
Product/service
Available Not available
Government services
Collection of pensions and benefits

Collect government forms

Passport applications

Car tax renewals and DVLA services

Travel services
On-demand foreign currency

Pre-ordered foreign currency

Methods of payment
Cash

Debit or credit card

Cheque

PO Budget Card

* Domestic parcels over 6kg were not part of the original product offer but should now be available
through most PO Local branches. However, our research has found the availability of parcel
services varies from branch to branch
** Restrictions apply
*** Only the Easy Access account
**** Moneygram is currently being piloted in a small number of branches
This table reflects the products and services available through PO Locals when the research was
undertaken. This reflects core post office services and is therefore not necessarily an exhaustive list. For
example, some branches may offer local services.
Local but limited?
47
Consumer Focus
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Published: March 2011
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