Tesco deal sparks post offices fear
Over 300 local post offices are under threat after supermarket giant Tesco buys convenience store operator T&S stores, and hundreds more could face closure as the convenience store industry consolidates.
The T&S portfolio includes the Dillons, Day & Nite and One-Stop chains, and contains 329 small post offices, already an endangered species across the country.
Tesco wants to convert around 450 of the 1,200-strong portfolio into Tesco Express stores, and is likely to keep the others under the same brand names – although it wants to sell the Dillons chain.
A spokesman for Tesco said the company had not yet taken a decision over whether to shut the post offices. “At the moment, there are no post offices in Tesco Express stores – it doesn’t really fit with the format,” the spokesman acknowledged. “However, there are no current plans to shut any of them.”
A Post Office spokesman said the organisation was holding regular meetings with Tesco. “We’ve got to see what Tesco’s plans are,” he said. Post Office chairman Allan Leighton and Tesco boss Sir Terry Leahy were bitter rivals in the supermarket arena when Mr Leighton headed supermarket chain Asda.
Tesco agreed to buy T&S for £377m in October. The announcement came shortly after the acquisition of Alldays by the Co-operative Group. There are rumours that TM Retail, which owns the Forbuoys, Martin’s and RS McColl chains, containing around 400 post offices, is also up for sale.
The National Federation of Subpostmasters said that the impact of Tesco’s buyout was a concern. “Post office franchisees tend to apply hard commercial logic when deciding whether to renew their contracts, and over the past few years this had led to a few supermarkets closing branches on their premises”, the federation said.
Further closure of post offices in convenience stores would come as a blow to government efforts to keep the lossmaking post office network from collapsing. Only last week, the DTI announced that subpostmasters in deprived urban areas will be offered up to £50,000 each to stop them shutting up.
The Government has also pledged £450m to keep the rural network from being depleted.
It is expected that more subpostmasters will decide to close their offices when benefits begin to stop being paid over post office counters in April, reducing the footfall in the stores. The average age of subpostmasters is also rising, with many wanting to retire soon.
Though Royal Mail is planning to close some of the urban network, it is only offices near each other that are threatened. It has pledged that, after these closures, more than 95pc of people in towns and cities would still live within a mile of a post office.
However, it has also stressed that many post office closures happen when subpostmasters choose to retire, or stores choose to close them, rather than by the choice of Royal Mail.
