The Village Stores Management Committee have circulated a list of answers to frequently-asked questions ahead of next Tuesday's vote on whether or not to put a Post Office Local in Brightwell Village Stores. Members should have received this list by email or hand-delivery, but if not, it is available below, together with Jim Sanger's comments in reply.
Proposal for Post Office Local (POL) in Brightwell-cum-Sotwell Community
Village Stores Ltd
number of Members have been responded to individually, however, as many of the
questions were being frequently asked by different Members, this composite
response is being sent to all Members via their known email address,
hand-delivered where necessary and posted on the Village website.
Q1. You state that
“the Management Committee is supporting the Post Office Local proposal as a
sound business and community venture”.
Was this decision unanimous?
Please may we see the basis on which you state that it is “.. a sound
business …. venture” and the estimated benefits and costs projected. In detail:
committee was quorate and the vote was unanimous. The ‘ sound business venture’ decision was based on the
Management Committee’s three year financial comparisons plan available on the
village website, and information received from other similar community shops
and an independent study commissioned from Plunkett.
Q2.How the estimated
“new revenue” is calculated (eg on the basis of the actual revenue generated
during the last year by the existing service or a projection for the coming
figures provided by the post office were actual revenue less 20%, as is their
policy when providing probably income figures. Our three financial comparison
plan has been based on a conservative uplift based on the experience of other
community shops as in response to Q1above.
Q3.You state that
“all paid staff will be required to undertake....POL duties”. How will you cover lunch time when paid
staff may not be in the shop and the inevitable holidays and how much is this
estimated to cost?
the staffing budget there is always an uplift for overtime and incidental cover
as necessary and this includes holiday cover. In the past year we have used
this provision on a number of occasions. In addition we so far have three new
volunteers willing to be trained for the POL duties.
Q4.You state that
the “Post Office … will pay the majority of the improvements required to
integrate a Post Office”. What
estimates have you received for the cost of these and how much will the Village
Stores be required to fund itself?
stated in the original fact sheet the Post Office will invest £10,000 to
install all the necessary counter equipment, electrics, and all security
equipment and systems. A
contingency of £500 has been allocated for any incidental costs the shop may
need to meet. Other work such as
moving stock and shelves will be done by volunteers and these have already been
Q5.You state that
the contract can be terminated without any financial penalty to the shop after
eighteen months. Whose
responsibility is it to remove the POL technology and to put the shop back into
the position it was before? If
this is at least partly to fall on the shop, how much is this likely to cost
Post Office will remove their entire infrastructure free of charge. If the
management committee consider there is further changes required, then it is
likely to be moving shelves and stock and this will either be undertaken by
management committee members and volunteers, or there may be a small cost which
the shop will have to meet.
Q6.You state that
there are “no up-front stock costs for Post office services”. Will all POL stock, including envelopes
etc, be provided on a consignment basis?
stock related to the post office services will be provided at no cost to the
shop. The stock remains the
property of the post office. Stock
is replaced, upon request, within 24 hours.
calculated the cost of purchasing stock for the “related services” if the POL
is not in the shop? If so, how
much is it likely to involve and what margin will you receive on the sales of
stamps, for instance?
management committee has investigated the provision of items such as stamps
etc., and the cost of each these services was included in the fact sheet
delivered to every member. If the POL is not in the shop then the Post Office
will provide a service elsewhere in the village – there would be no point in
competing for these services as margins are low and costs are too high –
including an ATM machine. However,
this would be reviewed when a decision is reached and the future known.
Q8.The Post Office
is now open for a lesser number of hours than the shop. You state that “the PO is committed to
providing services in Brightwell“ and mention a mobile van. What other options are there?
shop management committee has the same information as those who attended the
open meeting in November. At that
meeting the post office said they had a commitment to providing services in
Brightwell, and that they would look at how this could be delivered once the decision
is reached about the Post Office Local in the shop. They did however indicate that this could be a 10/12 hours
service provided by a core postmaster, somewhere in the village. It would be a matter for that
core postmaster to negotiate for a venue.
The post office has since indicated that this service, albeit not 10/12
hours a week, could be provided by a van which calls into the village, maybe
once a week. This is not for the shop management committee it is entirely a
matter for the Post Office.
Q9.You state that
“more storage space will be required in both scenarios”. Has the cost of this been taken into
account in the estimate of the benefits and costs of the proposal? Why will the shop need extra storage
space if the POL is not located in the shop?
Yes, costs have been taken into account for extra space required. The Post
Office counter, stock and equipment, in reality, requires very little space. From
the break-even situation to a profitable situation, more general stock will be
required. The management committee
thought it opportune time to raise this issue with the Village Hall committee
that we may be looking for additional space. Space is particularly an issue at Christmas time with extra
stock, for a very short period of time, for the Christmas Hampers for the
elderly in the village, which the shop sources and packs.
Q10. Please may we
know the current estimate of the profit or loss of the shop for the year to 31
December 2015? How much was the
cost of interest on the loan and depreciation for the year?
the 3 year financial comparison on the website.
Q11.What was the
turnover for 2015 and what is the forecast turnover for 2016 and the gross
margins for both years?
the 3 year financial comparison on the website.
Q12.What was the
cash in the bank at 31 December 2015?
£19,216.04 – cash in hand £2322.42
Q13.How much of the
loan is still due to be repaid at 31 December 2015?
Current balance outstanding £620.62 – last payment due in March 2016
Q14.What is the
value of creditors (apart from the loan) at 31 December 2015?
Q15.What was the
value of stock at 31 December 2015?
Presently being calculated, will be advised when the figure is to hand.
Committee has clearly produced a cost benefit analysis of the POL proposal,
presumably going forward a number of years. May we please have a summary of this in financial terms and
an estimate of the risk involved by way of a high/low analysis?
financial calculation on the website. No risk as there is no cost to the Stores
– just commission paid on transactions.
Q17.Is the Post
Office still demanding that their counter is located next to the shop counter?
A. Yes, but the current shop
counter will retain its current serving length. See new layout plan
Q18.Where are you
planning to locate the receiving space for letters and parcels (currently
behind the Post Office counter).
has been accounted for in the new layout.
Q19.Where will the
extra storage space for POL stock be located?
has been accounted for in the new layout. However there is no need for extra
storage space for POL stock as the stock for use can be located to the rear of
the post office counter.
Re-stocking is on a 24 hour delivery service. Post and Parcels are
collected twice a day, morning and afternoon, so no great build up, except for
the Christmas period, when alternatives can be found, as necessary. – see Q 9
Q20.Why will the
shop without POL require an increased level of stock as stated by the
order to ensure viability there is a need to continually grow the business and
footfall. See Q 9
explored the possibility of having an ATM located in the shop? If so, what are the costs and benefits? If not, is this a service that could be
offered by the shop?
A. This has been explored; however ATM
machines require certain criteria around security and usage to be met. It is considered the Stores would be
unlikely to meet the criteria.
access be demanded by the Post Office?
If so, has the cost of this been factored in?
plans which are provided have both taken into account disabled access as
required in legislation and by the post office in any provision of a Post
Office Local. There are no
additional costs involved.
mentioned, you state that “all paid staff will be required to undertake....POL
duties”. What is the attitude of
the current paid staff to this?
law requires discussions with staff are kept confidential; therefore the
Management Committee is unable to answer this question.
Q24.If the current
paid staff do not stay, what are your contingency plans and how much have you
allowed in your projections for their replacement?
is a confidential item as above. Therefore, the Management Committee will deal
with this in a sensitive manner and within budget. However, as the shop’s long
term viability is essential we hope that the revenue increase would be a huge
incentive for any existing or new paid staff for the longevity of the post.
Q25.You state that
“extra volunteer staff is required in both scenarios”. Do you not have enough volunteers at
the moment to staff the shop as it stands?
A . We
do have volunteer gaps and are actively recruiting, with three new names having
been put forward in the past month.
However, committee members and fill-in volunteers are often available to
fill any gaps and the staff repeatedly assures the Management Committee that
they are able to cope if no volunteer is available. We will always continue to recruit and support our highly
valued present band of volunteers. Anyone
interested in volunteering please contact the shop.
Q26. I think (but
don’t know until I have seen the financial detail) that there is an assumption
that the co-location of the Post Office in the shop will improve the income of
the shop as a one-stop location.
Given that the current Post Office is very close it is questionable how
much extra income will come for Co-location. It would be helpful to understand this aspect.
A . Evidence
from other community shop/POLs proves that bringing footfall into a retail
premises to use the P.O. improves the profits of the retail business
27 Providing some detail of the shop design with enough time for people to
understand and question it will go a long way to dispel their fears about how
the shop will operate.
A. We had a further meeting with the Post Office design expert
this week; as soon as he sends the plans through to us we will make them public
Comparisons with other shops are useful but they need to be on a like for like
basis, in particular, do they work because of their specific staffing
above, we have look at models where staffing is mainly volunteer; part paid and
part volunteer and, those run entirely by paid staff. All these models run
successfully some have adapted over time to meet changes of increased business
giving extra profits to meet the business needs.
You state that staffing costs will be the same, but given the increased demands
and therefore higher staff remuneration, the potential cost of current staff
replacements, lunchtime cover it is impossible to understand this without
seeing how this has been calculated.
A. There will be no extra staff costs associated with the POL. The
Management Committee has made contingency plans. Our staffing budget for the
coming year has been increased by inflation. The budget for 2015 had
contingency sums to ensure that we could provide paid staff cover in the shop
as required. The paid staff will be required to operate the Post Office counter
service. At no cost, office support responsibilities would be carried out by
the Management Committee. The members of the management committee currently
carry out much of the shop office work on a voluntary i.e. Accounts, VAT,
Salaries, Bank Payments and Reconciliation, Insurance, Utilities, Maintenance,
Marketing, Advertising, general support etc.
It would be very helpful to understand what disadvantages the inclusion of the
Post Office have been considered and what residual risks remain.
A . We of course have tried hard to find the disadvantages to
having a P.O. in the shop. During our extensive research it has proved that any
perceived disadvantages around uncertainties that changes brings is soon
dispelled when the advantages become a reality in terms of business and
community benefit. Even the Post office contract can be reviewed after a year
meaning that we are taking out the financial risk to the shop. In terms of
disadvantage to staff and volunteers, evidence tells us that with all the
support in both training and retail that the Post office provides free of
charge, the staff and volunteers benefit by increasing their skill levels,
interest and by driving up profits increase job satisfaction.
Jim Sanger has
added the following comments to the above:
Questions as a result of the
projections circulated by the Management Committee on 29 January 2016.
Committee's projections are largely based on obtaining a 15% increase in sales
in 2016 over 2015 (never before achieved), incurring no extra costs as the
result of taking in the Post Office Local and restraining the growth in trading
expenses to 2.5%. The attached
analysis shows how a variation of these assumptions can significantly and
adversely alter the outcome by some £6,900 in 2016.
questions therefore also arise
- The growth in turnover over the last
three years has been 0.3%, 5.0% and 0.12%. How does the Management Committee justify the increase
of 15% projected for 2016, three times greater than ever achieved before
and more than £450 every week?
How do they justify the further growth above that level in 2017 and
2018 of 10% and 5%?
- Has any allowance been made in salaries
for the Government's increase in the minimum wage or for holiday cover or
- Marketing expenditure has reduced since
the last published accounts for 2014 by 39%. If the Management Committee are projecting an increase
in sales of 15% in 2016 and further growth in subsequent years, is this
reduction in marketing expenditure realistic?
- General expenses have reduced by 45%
since 2014 and are projected to stay at the low level. Is this justified?
- No provision has been made for the hire
of storage space, stated as being necessary for the inclusion, at least,
of the Post Office Local. How
much is this likely to cost?
We understand that the Post Offlice was paying £2,160 per year to
the Village Hall.
- Has any provision been made for the
liability for any shortfall in the takings of the Post Office Local which
is understood to be the responsibility of the Village Stores?
Questions as a result of the
projections circulated by the Management Committee on 29 January 2016.
spite of the extensive question and answer document circulated by the
Management Committee, there are still a number of questions which need to be
clarified if members are to make an informed decision on Tuesday 2
February. The needed clarification
to some of the questions (adopting the numbering used by the Management
Committee) is detailed below.
1.What is the quorum for the Management
Committee? How many attended the
meeting which supported the Post Office Local proposal?
3.How much was included in salaries costs in
2015 for overtime and holiday cover?
Does the Management Committee believe that this will be sufficient in
2016 if the Post Office Local is moved into the Village Stores?
4.Has the Management Committee received any
quotations for the alterations demanded by the Post Office? If so, how much will the proposed
5.Assuming that the counter will have been
moved, the Management Committee may decide that it will need to be moved back
to its present position if the contract is terminated in eighteen months
time. Will the Post Office cover
this? If not, how much is the
“small cost which the shop will have to meet”?
7.Where was the cost of the sale of stamps
included in the fact sheet already distributed?
9.You state in the fact sheet that “more
storage space will be required in both scenarios”. Is the Management Committee now saying that no storage space
will be needed for the inclusion of the Post Office Local in the Village
12 and 14.Creditors at 31 December 2014 were
£11,431.72. You state that they
are now £4,631.36, a reduction of £6,800.36, presumably paid out of the bank
account. Cash at bank and in hand
has, however, increased by at least £1,672.87. Where has this additional funding of £8,473.23 come from?
16.Does the Management Committee accept that
there is a risk to the Village Stores if there is a shortfall in calculated
takings, as has occurred in other Post Office Locals, the responsibilty for which
is understood to fall on the Village Stores?
17.If the Post Office Local is moved into the
Village Stores, how long will the Village Stores be closed? Has the cost of this in lost revenue
been factored in to the projections?
22.Do the plans for the relocation of the
counter take into account the need for seating space currently provided for,
and needed by, customers of the Post Office?
23 and 24.It is understood that the current
paid staff are not in favour of the Post Office Local being moved into the
Village Stores. Consequently,
there is likely to be the expense of hiring new staff. Has this been allowed for in the
28.As shown on the Village website, feedback
from local shops seems to vary with some advising against accepting a Post Office
Local. Have the Management
Committee been to Marcham, for instance?
29.You have included accountancy services in
your projections, does this mean that the Management Committee members will
stop carrying out the shop office work on a voluntary basis?
30.You state that “...any perceived
disadvantages …. is soon dispelled when the advantages become a reality in
terms of business and community benefit”.
Why, in that case, are at least two neighbouring shops advising against
accepting a Post Office Local?
30 January 2016
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