Australia Post toy pitch reminds us this protected government business hurts small business retailers

The Christmas catalogue from Australia Post strays far from the core remit of the organisation, as usual. While I have no issue with LPOs doing this, I do have an issue with government owned and protected corporate stores doing this, taking revenue from family businesses. Their toy pitch is interesting. A bit bland in my view, but interesting nevertheless.

Australia Post corporate stores tap into benefits not available to small business competitors. For example, major landlord do not place on them the same requirements of indie retailers.

Australia Post corporate store outlets can land shoppers in their businesses for a lower cost with the core monopoly services they offer. This makes customer acquisition cost for add on purchases, like games, lower.

I wrote a post back in 2013 that relates to the issue of Australia Post straying from its core remit. here it is:

An open letter to John Stanhope, Chairman Australia Post
Mark Fletcher
July 3rd, 2013 · 15 Comments

I was moved to write this open letter to John Stanhope, Chairman of Australia Post, after reading the article in The Australian Financial Review yesterday on page 22.

Dear John,

The feature article about you in The Australian Financial Review yesterday says that a big part of your job is persuading politicians that the rules around Post’s obligations need to be loosened – to align with a world in which “there is a younger generation, many of whom wouldn’t have written a letter, let alone post a letter.”

Really? You want the rules changed because the world has changed? You want your shareholder to protect you even more?

Hmm, let’s see how this goes – you go talk to your sole shareholder, the federal government, and ask them to change the rules to suit you, so you can pay the dividend they require.  The conflict is obvious.

I am surprised you want regulatory change as that has not stopped you doing what you want in the past.

It’s a changing and unfair world John. As your organisation has though your actions in opening retail outlets close to newsagents and expanding into non post related traditional to newsagency products, taking revenue from small family businesses and leveraging your government protected brand to achieve this.

I say Australia Post has abused its protected position to compete with small business newsagents through your corporate stores. Ink, book, cards, gifts – all sorts of items being sold by the post office. I have written about this here many times.

One of my own newsagencies faced stiff competition from one of your government owned stores. We were price compared by your public servants on more than one occasion for the purpose of competition. This government owned and protected retail business was trying hard to take sales from us.

And now you say the rules need to change to protect you.

The rules should not change, not in isolation. You can’t have it both ways – protected when you want and given more flexibility when you want. If there is to be a review of the rules under which you operate your whole engagement with the act needs to be assessed and publicly debated.

But before we have that debate we need to look at your ownership. Having the government owned business competing with commercial businesses is unfair. You need to get out of retail – sell them to local newsagents at a price that accounts for the damage you have done over the years.   You need to sell off your commercial courier business.

The government should only own and operate services that are not otherwise commercially viable yet which are considered an essential services for the community.

I accept you have challenges with the old print post model. They’re not new, they have been coming for ten years at least. I’d say this is why you have targeted newsagents in your corporate retail businesses over the last six to eight years. We were a soft target and you got away with taking our customers by using your monopoly.

John, what you have is a bloated retail network getting special treatment because of government ownership and taking special treatment by, in my view, operating outside the Act. It’s not a level playing field comparing the treatment of a government owned Australia Post shop and a newsagency in a shopping centre.

It frustrates me that the AFR gives you such excellent coverage when the backbone of retail in Australia, small business retailers, struggle to get issues of concern to them exposed in the media.

I hope the politicians refuse to change the rules under which you operate.

If you want to talk about this call me on 0418 321 338. I’d welcome the opportunity.

Mark Fletcher