1.2. Part and Parcel: The economic and social value of Post Office – Executive summary
As an iconic British brand, Post Office has long been a familiar institution in the United Kingdom. As one of the country’s largest retailers with more than 11,500 branches, Post Office plays a significant role in communities across the United Kingdom; in towns, villages and on high streets across all four nations. At nearly four centuries old, Post Office has evolved continuously to meet society’s needs and today brings essential services to countless communities – whether that involves posting a letter, taking out cash, or topping up the electricity meter.
However, the familiarity and ubiquity of Post Office to people across the country can mask the significant value that the retailer brings to United Kingdom. With 99% of households in the country living within three miles of a post office, it can be easy to consider Post Office branches as unremarkable and as a given. This report, and the research that underpins it, reminds the reader of both the social value that Post Office delivers to the most vulnerable in society and the convenience it brings to consumers and businesses. It confirms and expands upon previous research by NERA (2009), London Economics and YouGov (2016), and Public First (2020) that explored the value of Post Office.
Additionally, for the first time, this research also illuminates what had previously been less well understood: Post Office’s role as part of the underlying economic infrastructure of the United Kingdom and as an enabler of small- and medium-sized enterprises (SMEs). It illustrates that, as well as being an important backstop for the most vulnerable and excluded groups, Post Office also stimulates and facilitates economic activity at a national, regional and local level. With this in mind, the report structures the value of Post Office around five core themes, covering aspects of its economic significance as well as its social value.
With an unparalleled physical reach that few other businesses can claim, Post Office generates significant economic activity across each nation and every region of the United Kingdom.
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- At a national level, Post Office generates an economic impact of £4.7 billion across the United Kingdom a year. In fact, for every £1 spent by Post Office, an additional £1.51 is generated across the wider economy. That’s more than the economic impact of Heathrow Airport.
- Post Office’s branch network also supports communities at a local level. The expenditure of Post Office’s branches resulted in an average economic impact on the UK economy of £5.8 million per parliamentary constituency, which is equivalent to an economic contribution of £57 per person. Digging deeper, there were 102 constituencies (out of 650) associated with at least £7.5 million of UK-wide economic impact and 426 constituencies associated with an impact of at least £5 million. To demonstrate the breadth of the impact, the analysis shows that at least £2 million of UK-wide economic impact originated from every parliamentary constituency.
- Post Office supports c.50,000 full-time equivalent jobs across the United Kingdom – and as many as 5,500 jobs in some regions. That is equivalent to the number of full-time employees in a city the size of Lincoln or Exeter.
- Post Office is a vital piece of the United Kingdom’s underlying economic infrastructure, acting as an enabler of small businesses across the four nations. Small and medium-sized businesses regularly rely on their local post offices to operate – in fact, nearly three in 10 SMEs use Post Office at least once a week – and more than half use it at least once a month.
- SMEs hugely value the convenience that the Post Office network brings to their businesses – worth almost £1 billion per year overall to SMEs, which equates to over £175 per SME per year. SMEs use postal services almost every time they visit their local post office and greatly value the convenience of having a post office nearby. With more than 5,000 bank branches closing since 2015, Post Office is also increasingly a lifeline for SMEs by providing essential banking services, such as depositing cash without needing to shut up shop and travel to find a bank in a neighbouring town (if it still has one).
Post Office acts as a local anchor to the United Kingdom’s high streets, by driving footfall and generating wider nearby economic activity
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- Post offices bring huge volumes of additional spending to high streets. In fact, visits to post offices generate over £3 billion a year of spending in nearby shops and businesses.1 This additional spending takes place right across the United Kingdom, but is particularly strong in Northern Ireland, Wales and the North East of England.
- Operating a post office also delivers substantial value to Postmasters, by generating nearly £1 billion of spending in host retailers as a result of the customers that their post office attracts. In fact, nearly half of Postmasters believe that their retail outlet would not survive without their post office.
- Post offices are particularly important economic pillars in rural communities, with more than a quarter of post offices serving as the last remaining shop in the village, supporting as many as 30 million visits each year in these branches.
Post Office also brings huge social value to communities by providing convenience for consumers and fostering pride of place – particularly in rural areas
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- Half of consumers across the United Kingdom believe Post Office fosters a sense of belonging to the community and that it is important to its identity – particularly the elderly and those with disabilities, from rural areas or on lower incomes.
- Post offices are especially valuable to rural communities, who place a greater value on Post Office than those in urban areas – with a particular focus on cash and banking services, given the absence of convenient alternatives.
- Post Office also delivers ease of access and convenience for consumers by bringing a range of services under one roof, with six in every seven consumers and SMEs believing it is important for a post office to be nearby and convenient to get to. Consumers place particularly high value on Post Office’s postal services.
As the United Kingdom becomes increasingly digital, Post Office’s face-to-face service continues to serve as an essential backstop for the most vulnerable and excluded groups in society
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- The Post Office network as a whole has an annual social value to consumers of nearly £4 billion. It is striking that Post Office’s social value remains so high, even in the midst of an unprecedented cost of living crisis, which (due to a reduced ability to pay) is likely to have dampened respondents’ valuations considerably.
- Vulnerable consumers place a particularly high value on Post Office. Not only is usage higher among vulnerable customers, but those customers are also willing to pay around one and a half times the amount that non-vulnerable consumers would pay to prevent their nearest Post Office from moving one mile away, despite typically having lower incomes.
- With the decline of high street banks, Post Office is the mainstay of the United Kingdom’s banking infrastructure for vulnerable and less well-off individuals. In fact, those in lower social grades (C2DE) are willing to pay three times the amount that those in higher grades (ABC1) are willing to pay for these services.