The Post Office is expecting to secure nearly three-quarters of its £120m commitment to boost postmaster pay by March 2026, as it rolls out automated cash and mail systems nationwide.
Chief revenue officer Dominic Grounsell told The Grocer it remained the Post Office’s ambition to reach the full target, which forms part of the company’s transformation plan laid out in November 2024, but acknowledged the final figure may fall short.
“It’s more likely to be around £86m but if we can get slightly higher that would be fantastic,” he said. “Of course, it’s not enough, but it’s a step in the right direction.
“The point is to create conditions for success in the future. There isn’t a pot of cash sitting at Post Office – the way we generate remuneration is to work together and for postmasters to sell products that the customers want.”
Grounsell said to drive revenue, it was focused on innovating products and streamlining services from its two core product areas: mails & parcels and cash & banking – as these together make up 80% of a postmaster’s income.
“It’s about making the Post Office an attractive and relevant proposition for the future, but also helping postmasters sell our products more effectively,” said Grounsell.
The state-owned company has begun rolling out technology to streamline and speed up cash and banking services, which are being funded centrally.
This includes high-speed note counters, capable of processing up to 1,200 notes per minute with integrated counterfeit detection. Around 5,000 units are expected to be in branches by the end of the year.
The Post Office is also installing teller cash recyclers (TCRs), which automate deposits and withdrawals while securing cash within an integrated safe. By speeding up transactions, TCRs aim to reduce customer wait times. So far 110 devices have been deployed out of a planned 500.
Postmasters have welcomed the new systems, highlighting improved speed, reliability, and ease of use, Grounsell explained. They receive a fixed payment per transaction for handling cash deposits or cash withdrawal transactions.
Grounsell said streamlining these services was critical, with the Post Office now being the largest handler of cash deposits and withdrawals in the UK as banks move off the high street.
“We’re becoming the last point of access for people who want to put cash in their bank accounts, so we needed to create better solutions for postmasters to deal with the higher volumes of cash and increase their profitability,” he added.
The Post Office has also recently partnered with InPost to help branches drive additional footfall through parcel send, receive and return services. A trial is currently underway.
As part of its ambition to grow revenue, it has also launched new products, including re-entering the personal loans market in July through a partnership with AI credit platform Lendable. Customers can borrow between £1,000 and £25,000 with rates starting at 8.1% APR and repayment terms of one to five years.
In parcels, the business has worked with DPD to create a priority service exclusive to the Post Office, offering guaranteed next-day delivery with a one-hour time slot, dubbed DPD Gold.
Grounsell said the company was also developing a new Post Office app to further digitalise services, calling it “a big focus for next year”.
“Revenue growth unlocks remuneration growth, so we need to drive volume, increase value, and optimise the mix of products and services,” he said. “We’ve got an incredible roster of new ideas – it’s all about execution now.”
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