**** Press release Wednesday 3rd April 2024
GCA makes detailed submission to Ofcom to protect its members, small businesses and consumers
The UK’s Greeting Card Association (GCA) has submitted its response to Ofcom’s proposals) to weaken the ‘Universal Service Obligation’ (USO) cutting back letter deliveries to five or even three days per week and giving Royal Mail more freedom to raise prices.
It’s submission can be found at GCA response to Ofcom’s The Future of the Postal Service Consultation
This week, Royal Mail has raised raise both first and second class stamp prices by 10p to £1.35 and 85p respectively. This is the fourth time first class stamp prices have risen in the last 24 months and a 13pc rise in second class prices despite a commitment to peg the second-class stamp to inflation.
In the submission, the GCA makes clear:
- More price rises and service reductions will accelerate a decline in the British postal service, leading to increasingly frequent requests for bailouts.
- There is no underpinned service recovery plans or evidence of meaningful progress to
restore the Royal Mail service to legally required levels. - There is no historical precedence of a declining industry recovering by radically increasing
prices whilst concurrently dramatically reducing service. The GCA therefore has no
confidence that Ofcom’s currently proposed solutions will do anything other than
accelerate existing postal decline. - it’s simply unjust to ask the British public to accept weaker service or the cost of subsidies, when far simpler solutions would fix things faster.
In the GCA’s response to the regulator it asks that:
- Ofcom demands an immediate service stabilisation and restoration of public confidence in postal service levels as a priority.
- Any future stamp price rises should be conditional on Royal Mail delivering its required USO service levels. Tomorrow’s 10p on 7bn letters with no volume loss will raise over £100m for Royal Mail (based on Ofcom data that suggests 17pc of that volume is currently USO regulated)
- Royal Mail should not be given the freedom to set pricing for monopoly products without transparent econometric or price elasticity modelling and meaningful consultation with consumer advocates and trade associations ahead of future pricing changes.
- Saturday deliveries should stay. Saturday delivery is crucial to GCA members and
consumers. Customers regularly order cards in anticipation of posting to, seeing a loved one over the weekend, and Saturday provides a critical backstop given current quality of service performance. It is even more critical in the run up to big seasonal events such as Mother’s Day, Father’s Day and Easter which fall on a Sunday. - Royal Mail explains how currently applying a peak surcharge to business letters during each festive period is consistent with its claim that falling letter volumes cause network under utilisation which is the reason letter prices must rise.
- Royal Mail takes far more initiative approach to stem letter volume declines and plan to return sectors of their Letters business to growth. The GCA’s continues to engage around commercial opportunities, such as lowering the price of stamps ahead of Christmas.
- There’s greater transparency from Royal Mail – in a market that Ofcom advises is highly unlikely to attract new entrants, there are extremely limited reasons why data can be justified as commercially confidential, especially in circumstances where Royal Mail are claiming they require further regulatory relief, bailouts and/or state support to continue.
The GCA’s chief executive officer Amanda Fergusson said:
“The GCA represents a thriving, vibrant creative industry, contributing £1.5bn to the UK economy, and consisting of over 500 members up and down the country.
“Ofcom’s own data indicates greeting cards are critical to how Royal Mail is perceived by end consumers. Cards are the most frequent things UK consumers post and 42 per cent of customers now say sending cards is the only time they use Royal Mail.
“We strongly suggest the immediate priority is that Royal Mail gets back to the day job – ensuring the vital, thriving postal service Brits demand is put back on track with no excuses.
“We know that the small businesses we represent are fearful that regulatory reform will ignore their needs and the clear demands of their customers. They expect a postal service that’s national, reliable and affordable and they’re not getting it.”
Further information: Nick Agarwal, +44 (0)7568 101045
Andrea Ross, +44 (0)7961 776339
gca@arena-pr.com
Editors’ Notes
Benefits to Mental Wellbeing
Cards are tangible and tactile – They not only create an emotional connection between the sender and recipient but a physical one too, knowing the card has been touched by both parties. They can be held, kept and cherished. The words inside are a physical record and together with the imagery on a card, makes that message more memorable. When information is presented both verbally and visually, we are more likely to remember it.
- The benefits to mental wellbeing are numerous. The recipient can feel more socially connected and less alone. Reducing a sense of isolation through sending a card is an easy way to make a difference and show that you are thinking of that person.
- Knowing that someone has taken the time to choose a card sends a clear message that they want to keep in touch. They may also feel more worthwhile and valued, knowing that someone has put in the care and effort to send a card.
- For an anniversary or birthday, the sender will feel reassured that they haven’t been forgotten and that their relationship is appreciated. A sympathy card can communicate comfort and tenderness, a get well card can inspire hope and show how much you care, whereas a birthday or just because can convey humour, fun and happiness.
- It isn’t just the recipient that benefits psychologically from receiving a card, but the sender too. Research shows that being kind and generous leads to more positive mood and less anxiety1. The evidence certainly points to the fact that sending and receiving cards leads to greater happiness through keeping us emotionally connected
About the Greeting Card Association
The Greeting Card Association (GCA) is an independent, not-for-profit trade organisation operating for the benefit of its members and has been the voice of the greeting card industry, providing support to its members since 1919.
- The GCA embraces over 500 publishers, retailers, agents, distributors and recommended suppliers of materials and services and is the voice of the British greeting card industry, representing the industry to stakeholders such as postal service providers, government, colleges and schools.
- Greeting cards themselves are part of a world-leading British creative industry worth over £1.5bn to the UK economy, at the forefront of innovative design and delivering important export revenue to the UK.
- Consumers in the UK, spent £1.5 billion on single greeting cards in 2022, excluding packs and boxes of cards and the British send more cards per person than any other nation.
- Greeting cards build relationships. Sending and receiving a greeting card creates a strong connection and the GCA’s members facilitates and celebrates positive communication between people of all backgrounds.
- The GCA’s purpose is to ensure the wellbeing of the greeting card industry and to promote the absolute joy of sending and receiving a well-chosen card. Its mission is to passionately support the growth and promotion of the greeting card industry and its vision is for everyone to feel connected by the sending and receiving of greeting cards
