Royal Mail must ‘tread carefully’ on stamp price hikes, business minister warns

Royal Mail must ‘tread carefully’ when considering further stamp price hikes because spiralling costs are stopping people from using its services, a Government Minister has warned.

Kevin Hollinrake, Minister for Enterprise, Markets and Small Business, told The Mail on Sunday that three price rises for first class stamps since April last year are making the public avoid sending letters and greeting cards.

It came as small business owners said they were suffering in the run-up to Christmas as soaring delivery costs hit their sales by driving away customers.

Letter of intent: Three price rises for first class stamps since April last year are making the public avoid sending letters and greeting cards

Hollinrake said: ‘People will instead rely on other forms of communication such as email which is already happening. So Royal Mail should tread carefully.’

Several entrepreneurs told The Mail on Sunday that the 500-year-old delivery group had damaged their businesses as rising stamp costs and unreliable deliveries forced them to make cutbacks or pass price hikes on to their customers.

Zoe Lacey, a greeting card designer from London, said many of her customers were sending fewer cards this Christmas because of the higher price of postage.

‘I’ve sold 30 per cent fewer Christmas cards this year than last year,’ she said.

In October, Royal Mail raised the price of a first class stamp to a record £1.25 following a previous increase in April 2022 from 85p to 95p, and then up to £1.10 last April.

Second class stamps rose from 68p to 75p last April.

Kayleigh Priest, a card designer based in the West Midlands, said she had been forced to increase prices to offset the higher cost of postage and there had been a ‘notable drop’ in the sales of some of her products.

Paulomi Debnath, a London-based jewellery maker, said she fears she may no longer be able to afford to offer customers free delivery, which is likely to dent her sales.

‘It’s undeniable that the Royal Mail’s double stamp price hike this year has cast a shadow over my business,’ she said.

Last month, the Greeting Card Association launched a campaign to put pressure on regulator Ofcom to stop Royal Mail’s frequent price rises.

Martin Seidenberg, who took over in the summer as head of Royal Mail’s parent company International Distributions Services, sparked fury last month when he said the £1.25 cost of a first class stamp was a ‘bargain’ compared to the price of a Pret A Manger coffee, despite the rapidly escalating price of postage and a dramatic drop in service.

A Royal Mail spokesperson said: ‘Letter volumes have fallen from 20 billion in 2004/5 to 7 billion a year in 2022/3, while the number of addresses has risen by four million in the same period. 

‘Urgent reform is needed and we are pleased that Ofcom is has announced it will be considering options for the Universal Service.’

This post first appeared on Dailymail.co.uk