Tesco could save 100 Post Offices from closing amid shake up
Check our map to see which locations are at risk
SUPERMARKET giant Tesco could swoop in to save more than 100 Post Office branches from closure.
The development follows an announcement by Post Office chairman Nigel Railton just months ago that the organisation intended to sell off all its directly owned “Crown” branches.
Speaking to a group of MPs this week, Railton confirmed that Tesco had expressed interest in acquiring the sites, according to a report by .
The branches in question currently employ around 1,000 workers, whose future hangs in the balance as the Post Office moves forward with its plans.
The decision to sell off its directly owned sites is a key element of the state-owned firm’s strategy to shift entirely to a franchised business model.
Franchising is a business model where a company (the franchisor) grants permission to an individual or group (the franchisee) to operate a business using its brand, products, and processes in exchange for a fee.
Approximately 99% of Post Office branches are now operated by franchisees, with only 1% of sites being directly managed.
The Post Office said in November that it does not plan to reduce its approximately 8,500 branches, which independent postmasters and local businesses operate.
Additionally, there are 2,000 Post Offices managed by retailers, such as WHSmith and the Co-op, which will remain unaffected.
A Post Office spokesperson said: “We are fully committed to engaging openly and transparently with MPs regarding any potential plans related to our Directly Managed Branch (DMB) network.
“Since inviting expressions of interest for 108 Post Offices that we currently operate, we have received interest from retail partners and independent postmasters in the hundreds.
“We remain committed to engaging with our trade unions over the potential future ownership of our Directly Managed Branches, which are loss-making for us, into March before updating our colleagues who work in these branches on any potential next steps.”
Tesco has been approached for comment.
The number of Post Offices in operation across the UK has significantly declined since the 1960s, when there were approximately 25,000 branches.
This decline is partly due to more people receiving benefits and pensions directly into their bank accounts, reducing their need for the Post Office’s services.
Post Offices were once the sole providers of postage stamps, but now stamps can be purchased from supermarkets and petrol stations.
Over the past decade, the number of branches has stabilised at around 11,500.
Despite these changes, the 364-year-old institution remains wholly owned by the state and continues to be Britain’s largest retail network.
TROUBLED TIMES
It comes after it was revealed that government ministers are exploring plans to transfer ownership to employees, similar to the model used by the John Lewis Partnership.
It is based on the idea that its workers are each part-owners of the company and receive a share of annual profits.
Whitehall insiders admitted that the Post Office is in a lot of trouble and is only financially viable because of an annual subsidy it receives from the government.
Calls for a review of the company’s ownership model have grown amid rising public anger at the wrongful conviction of hundreds of sub-postmasters.
Highlighted by the ITV drama Mr Bates vs The Post Office, it has been labelled Britain’s biggest miscarriage of justice after they were accused of stealing cash from their branches.
Many had their lives destroyed, were imprisoned, and some even passed away or committed suicide before finally being exonerated.
Former sub-postmaster Sir Alan Bates, who tirelessly campaigned for justice, is still waiting to agree on a compensation settlement and has called on the government to consider suing former directors of the company.
Why are retailers closing shops?
EMPTY shops have become an eyesore on many British high streets and are often symbolic of a town centre’s decline.
The Sun’s business editor Ashley Armstrong explains why so many retailers are shutting their doors.
In many cases, retailers are shutting stores because they are no longer the money-makers they once were because of the rise of online shopping.
Falling store sales and rising staff costs have made it even more expensive for shops to stay open.
The British Retail Consortium has predicted that the Treasury’s hike to employer NICs from April 2025, will cost the retail sector £2.3billion.
At the same time, the minimum wage will rise to £12.21 an hour from April, and the minimum wage for people aged 18-20 will rise to £10 an hour, an increase of £1.40.
In some cases, retailers are shutting a store and reopening a new shop at the other end of a high street to reflect how a town has changed.
The problem is that when a big shop closes, footfall falls across the local high street, which puts more shops at risk of closing.
Retail parks are increasingly popular with shoppers, who want to be able to get easy, free parking at a time when local councils have hiked parking charges in towns.
Many retailers including Next and Marks & Spencer have been shutting stores on the high street and taking bigger stores in better-performing retail parks instead.
In some cases, stores have been shut when a retailer goes bust, as in the case of Carpetright, Debenhams, Dorothy Perkins, Paperchase, Ted Baker, The Body Shop, Topshop and Wilko to name a few.
What’s increasingly common is when a chain goes bust a rival retailer or private equity firm snaps up the intellectual property rights so they can own the brand and sell it online.
They may go on to open a handful of stores if there is customer demand, but there are rarely ever as many stores or in the same places.
The Centre for Retail Research (CRR) has warned that around 17,350 retail sites are expected to shut down this year.