Tesco considers franchise of axed Post Office branches

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Retail Reporter

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One contract was even an extension of the Horizon deal with the Post Office itself, worth £63m.
One contract was even an extension of the Horizon deal with the Post Office itself, worth £63m.

Tesco has shown an interest in acquiring a number of axed Post Office branches as part of a franchise model, according to reports.

Post Office chairman Nigel Railton told a group of MPs earlier this week that the UK’s biggest grocer had expressed interest in the 108-site Crown Post Office network, according to Sky News.

WHSmith and the Co-op already run many post offices in the UK under a franchise model. It is the remainder of the offices, which are known as Crown Post Office, which Tesco has expressed interest in.

The fate of the Crown Post Offices has been in question since last Autumn, when Railton confirmed details of his transformation plan as part of a wider strategic review in the wake of the Horizon IT scandal.

The Horizon IT system saw faulty accounting information spark the wrongful prosecutions of more than 900 postmasters, and is the subject of both a Government inquiry and an internal Post Office inquiry.

At the time, there was concern that the sites would close, but retailers’ interest – including Tesco’s – suggest a franchise model is more likely.

The Communication Workers Union (CWU) had described the sites’ potential closure as “tone deaf as it is immoral”.

Last October, Conservative shadow business secretary Kevin Hollinrake suggested the entire Post Office could be turned into a John Lewis-style mutual, in which customers or stockholders own a majority of shares.

A Post Office spokesperson told Sky News: “We are fully committed to engaging openly and transparently with MPs regarding any potential plans related to our Directly Managed Branch (DMB) network.

“Since inviting expressions of interest for 108 Post Offices that we currently operate, we have received interest from retail partners and independent postmasters in the hundreds.

“We remain committed to engaging with our trade unions over the potential future ownership of our Directly Managed Branches, which are loss-making for us, into March before updating our colleagues who work in these branches on any potential next steps.”

CityAM has approached Tesco for comment.