La Poste raises the price of stamps by 3,6% in order to compensate for lost volumes

vendredi 31 juillet 2015

Analysts and investors alike felt a pang of relief yesterday at the La Poste investors’ day. The yearly event, which gathers a grand total of one investor, the French State, provided a unique opportunity for La Poste’s CEO to spell out in greater details its strategic plan : Restoring Margins With Paper and Scissors.

According to  La Poste’s CEO, the dramatic decrease of physical mail paves the way for a daring pricing policy, lower volumes leading to exponential increases of the unit price of stamps. By 2020, La Poste’s financial guidance forecasts a stamp price of about 125,568 euros, before inflation, against a final price in 2050 of about 534 millions euros and 37 cts for the very last letter sent via physical mail.

As La Poste’s head of “mortar and mortar" communication underlined during the press conference : “we don’t think that physical mail will disappear, at least as long as people enjoy receiving news from tax authorities, the police, their grand-parents or a combination thereof”.

Sound economics underpin the bold pricing policy as La Poste will keep on selling stamps vastly above marginal costs, shrewdly eschewing innovation, as befits any monopoly worth its salt. La Poste hence remains at the cutting edge of the management theory called “transition despite innovation.”   

The plan is internally known as “3 times more by 2017”, as it will lead to three times pricier mail, three times less volume and three times less to do for everyone. It has the benefit of maintaining low skilled employees in fittingly low paying jobs rather than engaging them in retraining and preparation for an alleged “digitalization of mail”.

Thanks to the decreasing workload, unions have greater latitude to applaud the strategic move, which comes after limiting opening hours of local post offices to fractions of seconds. To that end, La Poste’s CEO reminded skeptics yesterday that such initiative lead to tremendous efficiency gains, French postmen and postwomen ranking first in Europe for their speed in delivering “attempt delivery notices” across the country. 

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