UK catalogue industry uproar at size-based pricing delay
The catalogue industry is up in arms following Royal Mail’s decision to further delay the introduction of size-based pricing until April 2006, saying it will lead to increasing costs for mail order companies.
As a result of the size-based pricing scheme, first mooted two years ago (PM April 5, 2002), many catalogue firms have been increasing their pagination to take advantage.
But Nigel Swabey, chief executive of mail order company Scotts of Stow, says: “It takes time to increase the pagination of a catalogue from 48 to 150 pages, and we have made a massive investment to achieve this. Now that the introduction of size-based pricing has been delayed a further six months, we find ourselves paying a postage rate that is desperately uncompetitive.”
An industry forum held to debate the issues surrounding size-based pricing was attended by over 70 delegates, representing some of the largest users of postal services in the UK.
Many catalogue industry executives from companies such as Redcats, Damart and Book Club Associates said they had been taking steps to change the format and weight of mailings since the initiative was first announced.
Swabey adds: “I feel like the bride who has been preparing for her wedding for two years and has turned up for the marriage only to find that the groom couldn’t make it.”
A Royal Mail spokeswoman says: “We understand why some companies are not happy with the situation. We want to introduce size-based pricing as soon as possible, but, ultimately, it is up to watchdog Postcomm to decide when it can be implemented, once the consultation period has ended.
“Also, we will need to give a good period of notice so that companies can prepare for the changes.”
Meanwhile, Postcomm has announced it is going to open up the consumer postal market to Royal Mail’s competitors by January 2006, 15 months earlier than first anticipated.
Royal Mail has welcomed the decision, provided the regulations that prevent it from competing are removed.
