La Poste has been told it should consider reducing the frequency of mail deliveries. It was also advised to review the profitability of some of the diversified services delivery staff now carry out, and potentially end some in a report by state auditors the Cour des comptes.
The report, which was made public in February, claims La Poste’s strategy of diversification was not making enough profit and casting doubt on the group's financial future.
The Cour's suggestions include cutting back on six-day-a-week deliveries, saying these were no longer common in Europe.
It noted that France has more post offices than most countries, though it did not specifically state that some should close.
At the core of the problem is a continuing fall in letter deliveries, which accounted for 50% of revenue in 2010 but only 11% in 2023, the year the ruling was based on.
When published, it provoked a sharp retort from La Poste, who told French media that it would write to the the state auditors as soon as its 2024 full year results were published on February 27, to explain that its long-term strategy had been misunderstood.
The Cour gave La Poste and the government two months after the ruling on December 5 to make a formal response, but it did not do so.
Only one delivery round in two had diversified services2024 Andrey Vyrodov/Shutterstock
For deliveries and other activities deemed “in the public interest”, the Cour officials noted that most efforts to diversify, such as checking on elderly people, had failed.
These “public service activities” should be profitable, but if they are not, the government pays La Poste so the company does not lose too much money.
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The Cour noted that only one delivery round in two had any diversified services.
It also stressed that France was one of very few countries in the world to continue six-day post deliveries, at the same time as customers were complaining of delivery delays and the rising cost of stamps.
Moving the delivery focus away from letters and towards parcels had not made enough money to compensate for the loss of letter revenue, the Cour said.
It recommended “La Poste examines closely its new services and prepares to sell the less profitable, or non-strategic ones, and does not change the top priority of mail delivery for delivery staff.”
Groupe La Poste’s strategy also includes boosting banking and insurance activities, notably by having the state-owned CNP Assurances moved under its umbrella.
But officials said predicted savings from merging the two firms were not materialising and La Poste risked dragging down the profitable CNP Assurances business.
Traditionally La Poste has offered basic banking services from all post offices, including current and savings accounts with a cheque book. It often takes on “difficult” clients who have had problems with other banks.
Moving towards parcels had not made enough money to compensate for the loss of letter revenueHadrian / Shutterstock
With the fall in the number of letters, this banking service has been boosted by La Poste offering more lending, and setting up an investment banking division.
However, the Cour noted that the net profit in 2023 – €524million – was half that of 2022 and relied heavily on CNP Assurances, which on its own made a profit of €1.5billion. Indeed, without CNP Assurances the group as a whole would have made a loss.
Recommendations from the state auditors to La Poste included a strict evaluation of the profitability and costs of future acquisitions, especially in the health field.
The Finance Ministry was told it must develop a common strategy for La Poste across its various units, while the Prime Minister’s office was instructed to work with La Poste to evaluate the effectiveness of all public service missions, reduce their scope, and adjust compensation that the government pays as a result.
La Poste's €1.4billion profit in 2024
La Poste’s 2024 results were much better than the 2023 figures cited in the Cour des Comptes report.
Overall, net profit was €1.4billion, up three times from 2023, even though overall sales only increased by 1.5% to €36.4billion.
However, the problem of declining mail continued, with 8.2% fewer letters delivered. The number of parcels rose by 2.7%, largely thanks to the Geopost branch rather than Colissimo.
Philippe Wahl, head of La Poste, said he welcomed the Cour des Comptes’ call for an adaptation of public service missions as being “positive”.
The missions, which cost the group €2.2million without being fully compensated by the state, fall under three headings: the universal postal service, newspaper distribution and providing services to small towns.
Banking activities were still in the red, with a loss of €158million, but were rescued again by a very profitable year for CNP Assurances, which is owned by La Banque Postale.
