Mick Clifford: An Post is indeed doing fine, but the company's original business is in bad shape

Irish Examiner

16-07-2025

Managing decline is never easy. So it has been with Ireland's post offices.
Over the last 30 years or so, the State's network has been reduced from nearly 2,000 to less than 1,000.
The decline was inevitable with the flight from rural to urban Ireland.
The introduction of the internet condemned what is now refereed to as 'snail mail' to the status of a sunset industry.
Then along came the pandemic to accelerate further the migration of business and communication online.
That reality is behind the public perception of the current status of An Post.
Yet, as the company's CEO David McRedmond pointed out on Wednesday, the network accounts for only around 20% of the company's business.
So it is that under McRedmond's stewardship, An Post has accelerated diversification away from mail delivery and into ecommerce and financial services.
The result has been a company that returned a profit of €5.6m for 2024, up from a €20m loss the previous year.
An Post also had, for the first time, revenues in excess of €1bn.
That is fair going for a company associated in the public mind — erroneously — with the dying habit of snail mail.
So it was no surprise that poor McRedmond nearly choked on his cornflakes on holiday in Italy when he saw a headline saying that his company was 'on the brink'.
He rang Morning Ireland to put the nation right and he let fly. It would be hard to blame him.
Presumably, he was expecting plaudits on his return home for the healthy finances instead of reading that he was overseeing a basket case.
An Post CEO David McRedmond pointed out that the post office network accounts for only around 20% of the company's business. Picture: Brian Lawless
An Post is indeed doing fine. But it is also the case that the company's original business is in bad shape.
In line with global trends, mail volumes were down by 7.6% in 2024.
Despite that, revenue from mail increased, but that is a scenario that can hardly be sustained.
As reported in Wednesday's Irish Examiner, suggestions are being floated that delivery days might be cut.
That would be a rational business decision, but one that would induce headaches among some politicians.
The post office has been an integral feature of rural, and to a lesser but still significant extent, urban Ireland for centuries.
As is often the case, perception, on which much of politics is often based, is very different from reality in this sphere.
In 1995, there were 1,839 post offices, which was down by around 500 from 10 years previous.
At the last count, there were 960.
In the last decade alone, 257 have closed.
According to a reply to a parliamentary question from Sinn Féin's David Cullinane, 201 of these were categorised as 'rural' and the remaining 56 as 'urban'.
Cullinane described the figures as 'shocking'.
'The local post office plays a vital role in Irish life, providing financial services, access to the social welfare system, communication infrastructure, and community supports,' he said.
'In many areas, they are the only visible expression of the State.'
Maybe so, but the reality is that post offices are run as businesses by independent postmasters who are effectively franchisees.
The average age of postmasters is pretty high. When retirement beckons these days, there are very few willing to take up the slack.
In May, the Irish Postmasters Union commissioned a report from Grant Thornton to map out the future.
The consultant calculated that a strategic investment of €15m annually, up from the current €10m, is required over the next five years to stay any further culling from the network.
If the money isn't forthcoming, the result would be 'cutting communities off from vital services, undermining national goals for regional equity, social cohesion and financial access', the report said.
The report also stated that that the network in Ireland is between €344m and €776m in terms of its annual social and economic value to communities.
Post offices are run as businesses by independent postmasters who are effectively franchisees. File picture: Maxwells
All of that may be something of a sideshow commercially within An Post.
Politically, however, it is the only show in town.
No government wants to be associated with what effectively would be further cuts to services particularly in rural Ireland.
So it was that, to mix a few metaphors, somebody in cabinet leaked in order to run a flag up the pole, suggesting that palms need to be greased in the name of votes.
Whomever could it have been?
The minister who brought the report to cabinet, Patrick O'Donovan, said that it certainly wasn't him.
One down, 14 ministers and a few super juniors to go.
Not only did a minister breach cabinet confidentiality with that leak, they also took it upon themselves to trample all over O'Donovan's well-tended patch.
No wonder he was angry at how this leak turned out.
By rights he should have got on the phone immediately to McRedmond and they could have shared their anger and mused on how commerce and politics sometimes just don't mix.