News & Press

Following his evidence on Post Office Network Transformation, given today to the Business, Innovation and Skills Committee inquiry, Mike O’Connor, Chief Executive of Consumer Focus, said:  

‘Starting this summer, we will see the largest shake-up of our Post Office network including the rollout of 2,000 new Post Office Locals. We conducted extensive consumer research on this new model which showed decidedly mixed results. People liked the convenience and longer opening hours, but also raised a number of red flags about some fundamental issues.¹ 

‘We have found problems with the quality of advice – with second class postage sold correctly in only one in five mystery shopper visits – and product availability.  A third of people told us that privacy was poor in PO Locals, with 19 per cent reluctant to conduct high-value or confidential transactions. The PO Locals service is also not always reliable – particular problems were shown with trained staff being unavailable.

‘We welcome the transformation programme, and want it to succeed and deliver for consumers which is why we are highlighting areas where the trials show areas of underperformance. Consumers need to know this is a reliable service they can depend on. A new approach is needed, as many post offices are economically unsustainable. But it would be a major missed opportunity if these issues are not put right before PO Locals are rolled out nationwide.’ 

From summer 2012, the Post Office’s Network Transformation will see one in five sub-post offices convert to the PO Local model as part of the largest set of planned changes in the Post Office’s history.  Most sub-post offices currently operate as part of a small shop, but have a separate post office counter with dedicated staff. The Locals model will see post office services delivered by trained shop staff from the main counter of retail outlets such as convenience stores or petrol stations, rather than from a separate dedicated post office area. 

Consumer Focus feels that pilot programme gives the opportunity to learn and make improvements to get this new model right. The postal watchdog is now calling on Post Office Limited to commit to:

• The development of a core menu of products and services, with a commitment to consult locally where circumstances suggest a core product or service cannot reasonably be offered.
• Addressing consumer confusion and lack of awareness over product and service availability by providing clear product and service information in-branch.
• Improving service standards via enhancements to in-branch staff training, the retailer support offer and in-branch quality control, monitoring and compliance processes.
• Addressing the physical environment of the branch – external and internal – to satisfy consumer concerns especially on issues such as privacy and security.
• Dealing with the cash supply arrangements in place for Locals branches. 

ENDS

NOTES TO EDITORS

1. Examples of some of the key findings of customer research and mystery shopping undertaken by Consumer Focus at 105 pilot PO Locals are below. The press release and report – ‘Open all hours’ – provide full details on the research: 

Quality of Service and Product Availability

• Consumer Focus mystery shopping found widespread evidence of inconsistent and inaccurate product and pricing advice. Just one example is that mystery shoppers were sold the correct postage for a Second Class Large Letter in just 21 per cent of PO Local visits – this dropped to 15 per cent during extended opening hours.
• Almost one in five customers (17 per cent) were told they couldn’t access a service which actually should have been available – this includes parcels over 6kg and core services such as Special Delivery transactions, cash withdrawals and electronic bill payments.
• Nearly a quarter (22 per cent) of PO Local’s users were advised they could not post a parcel between seven and 15kg in weight  – this rose to 28 per cent in branded large convenience stores. PO Locals are supposed to offer a full range of parcel services up to 20kg, the weight limit specified by the universal service.
• Mystery shoppers with eligible bank accounts were unable to withdraw cash in 10 per cent of visits to eligible branches. The research also found some PO Locals were capping the cash or benefits a consumer can withdraw. 

Opening hours and consumer use:

• Almost one in five (18 per cent) consumers said they now use the post office in this location less frequently than the previous post office in the area.
• In seven per cent of branches, mystery shoppers found that the opening times displayed varied between one visit and the next. 

Privacy

• A third of users (34 per cent) said the privacy available to them when undertaking transactions is poor or very poor, with 41 per cent of users saying it is worse than in other sub-post offices.
• One in five (20 per cent) use other branches because of concerns about privacy, staff training, or because they generally feel more comfortable undertaking high value transactions in other branches. 

Consumer Focus commissioned GfK to undertake two research projects in the 105 locations where PO Locals have been piloted. This included a face-to-face survey of 1,030 adults living in the catchment areas of these 105 branches. Six focus groups were held also across the UK. As part of the research, a mystery shopping exercise was undertaken with 362 visits undertaken (up to four visits to each of the 105 PO Local branches). Mystery shoppers were allocated two out of a total of five scenarios designed to test the quality of product and pricing advice they received – 724 scenarios were tested overall. Fieldwork was carried out in January and February 2012.

Following the Government’s consumer advocacy reforms, Consumer Focus will continue to act in the consumer interest across a wide-range of sectors until our general advocacy role passes to Citizens Advice in April 2013. As part of the reforms, Consumer Focus will establish a new unit to identify and represent consumers’ interests in complex, regulated sectors, including energy and postal issues and, in Scotland, water. Our Annual Plan for 2012-13 is available online.