Pay for the average Post Office retailer has increased by well below inflation at just 1.4% year on year, putting further strain on already struggling branches.

On 20 December, the Post Office published its annual report for the 2022/23 financial year showing total remuneration for PO branches had increased by £10m to £399m. Based on branch counts from March 2022 and March 2023, the average branch received £2,846 per month, up just £38 year on year.

Nearly all of the remuneration increase was made up of ‘one-off’ payments to cover energy increases and the fallout from the Royal Mail strikes rather than day-to-day trading.

While the average Post Office retailer saw their pay rise by just 1.4%, wage costs for the average Post Office staff member rose by 9.6%. Inflation was at 10.1% at the end of the annual report period.

The Post Office’s total revenue increased by £51m to £885m while its trading profit also grew £8m to £50m. However, Read described its ‘overall financial position’ as ‘considerably less robust’, with a total loss of £76m for the year.

Areas in sales growth included banking (+14%), travel money (+15%), insurance (+33%) bill payments (+54%) and government services (+24%). Declining areas include Mails (-13%) and retail, lottery and gift cards (-6%).

CWU subpostmaster branch representative Sean Hudson described the remuneration rise for retailers stating: “It’s derisory. Absolutely derisory. Postmasters are divided on a lot of things but there’s one area where we’re all in agreement. This isn’t anywhere near good enough.”

Post Office chief executive Nick Read admitted: “improving branch profitability remains a central challenge facing the business and is, accordingly, a clear priority.” Chairperson Henry Staunton said “This has, self-evidently, been a very difficult year for business as a whole and for retailers in particular.”

National Federation of Subpostmasters chief executive Calum Greenhow agreed the increase ‘does not cover the cost increase due to inflation’, adding: “This is why the NFSP is challenging Government to be open about its long-term vision for the network.” Greenhow claimed the largest sales decline – a £46m drop in PO mails revenue was due to Royal Mail strike action and cyber attacks. “These combined had a devastating impact on postmasters’ revenues,” he stated.

Staunton said: “There are also reasons to be optimistic. We are identifying new opportunities, notably in mails, banking and digital identity and, provided we are as committed to our future as we are to resolving our past, I firmly believe that the business can aim towards a brighter future.”

Providing an update on current performance, a Post Office spokesperson told Better Retailing: “Current Christmas trading is exceptionally strong. Last week, footfall into Post Office’s 11,500 branches was 14.6 million. 20% up in the same week last year. Last week, Post Office’s Mails revenues across all carriers was up 10% on the equivalent week last year. Stamp revenues are also up 10%. Post Offices processed around 6 million parcels last week. On banking, last week its banking revenue was up 9% on the same week last year with Postmasters serving 3.5 million banking customers.”