LONDON (Reuters) - The latest round of panic buying sweeping British consumers isn’t for fuel, as it was earlier this year when threats of a strike by the tanker drivers’ union led to long queues of cars snaking their way around filling stations.
Instead, the commodity Britons are desperately snapping up in bulk this month is stamps, after Royal Mail, the British postal service provider, announced it would raise prices after April 30 to make up for falling revenues.
The price rise - which will raise the cost of sending a letter first class by a huge 30 percent to 60 pence ($0.96), and the slower, second class by 39 percent to 50 pence - has sparked alarm across the country where consumers are facing slow wage growth and high inflation.
Royal Mail has limited the number of stamps supplied to retailers in advance of the price rise to “protect Royal Mail’s revenues,” said a statement from the service.
“We put arrangements in place in February with all our major retailers to ensure that they have adequate stocks of stamps to meet genuine customer demand,” Royal Mail said.
Walking out of the Houndsditch post office in the City of London financial district around lunch time with a thick stack of 20 stamp books in hand, Sanjeev said the supply of 240 stamps would last him a good while, even given his preference for writing letters over emails.
“I thought, ‘Okay, I know the prices are going to go up’,” said the IT worker, who declined to give his last name. “But if...I could afford it, I would buy a lot more.”
Britain boasts a proud postal history, including introducing the world’s first adhesive postage stamp, the Penny Black, which in 1840 helped to make the country’s complex postal system cheaper and easier to use.
Like the U.S. Postal Service, Royal Mail has struggled to maintain its revenues in recent years, battered by a double-whammy of decreasing volumes driven by the rise of email and electronic bill-paying and more addresses to deliver to. Royal Mail said it has lost 1 billion pounds over the last four years.
But British consumers are feeling the pain too. Data from the Office for National Statistics released last month showed the UK economy shrank by more than expected in the last quarter of 2011, with real household disposable incomes falling by 1.2 percent last year, the biggest drop since 1977.
“At the end of the day, when you get paid, everything is gone,” said security officer George Osei, 54, walking out of a post office near Liverpool Street railway station in central London.
“Everything is going up - rent is going up, transportation is going up, fuel is going up. But wages are not going up.”
Vasanti Jethwa, manager of the Houndsditch post office, said her branch had seen about 25 percent more demand for stamps in recent weeks compared to last year.
“But how much can they buy?” she asked. “People are saying ‘when are they going up, when are they going up?’ People are worried, because of the economy. At the moment, some people are out of jobs and they can’t really afford stamps.”
Sanjeev said he thought the hubbub over stamps was misplaced, as postage in the age of email represents just a small portion of the rising cost of living for most.
“I think there are a lot bigger things going on than stamps,” he said, citing rising fuel prices. “The price of stamps is nothing.” ($1 = 0.6269 British pounds)
Reporting By Yeganeh Torbati