British New Issues

British New Issues and the Stamp Trade. The Recent Past and Possible Future.

By Robert Murray

 The letter reproduced here came as the result of many months of serious thought and discussion. My misgivings about the quantity and price of UK new issues had of course concerned me for some years, as it has so many collectors and dealers. But being someone whose daily life is the world of stamp collecting, who speaks to hundreds of collectors, and who is interested in the history – and the future – of the stamp hobby and business, recent events had pushed me to this final decision.

 The few days after circulating my letter saw quite a variety of responses;

            “I’m surprised you didn’t do this earlier.”

            “I suppose it’s probably time for me to kick the habit.”

            “If people don’t collect new issues, will they collect stamps at all ?” (To which I replied “There’s lots of folk collect Roman coins . . . even though the Romans have stopped doing new issues !”)

            “That’s going to make things difficult – you can’t depend on your local Post Office. And anyway, they don’t always get all the booklets and stuff.”

 Thirty or forty years ago the production of new stamps gave life and impetus to the philatelic world. Now it actually does the opposite. If the Post Office stopped issuing stamps (except for just those few needed for practical purposes – like posting letters !), what effect would there be on the hobby ?  Very little, I think.

 Royal Mail runs on a modern business management approach. Targets. Of course. Tallents House (“Royal Mail Stamps and Philatelic”) can’t reduce their issue list; they need to meet their targets. Nobody there can put forward the proposal that would actually make good business sense; that is to step back, look forward, cut back. They have to meet their targets.

 For me, writing this letter actually came as a bit of a relief. I’d been troubled on the moral front for some time. For example – “Collector’s Sheets” with ten first class stamps, for £13.50 ? What ?? 
Prestige stamp books (with some change off a tenner), which used to be anticipated by collectors when they were once-a-year. But four in one year ?  Where has the prestige gone ?  And what about “press sheets” ??

 Royal Mail makes and markets these, but I felt uncomfortable selling them. How could I justify them while maintaining respect for my customers ?

 You know sometimes a decision can be difficult, but as soon as you’ve made it you know you have done the right thing ?

 Here's the text of the letter I distributed to customers.

15 October 2009   I’ve been running a traditional stamp shop since 1977, always maintaining a stock of current UK stamps. For the past ten years we’ve run a special service, at minimal profit margin, trying to fill the gap felt by collectors when Royal Mail’s Philatelic Counters have either closed, or downgraded their quality of service. Over these years I have sometimes defended the Post Office’s new issue policy, at other times I have criticised it. I hope I have been fair and open-minded.  These last few years have seen the number and cost of new British stamps rise and rise. The number and range of extra products has increased. The “inauthenticity” of products such as “press sheets” has been raised. In May 2009, during a Trade Forum hosted by Royal Mail at Tallents House, I expressed my concerns on various matters. I also at that time made proposals for a new scheme to allow stamp shops to offer Royal Mail products more productively. Tallents House and their London bosses have been unable to make use of any part of these proposals.  Recent advertising publications from Royal Mail fill me with dismay for the future. Their wording has changed. It seems that we have now lost the style that came with a department of Royal Mail that served the collecting public. In its place we have an approach much more like the wording used by companies trying to talk people into buying collectors’ medallions, pewter spitfires and other “valued heirlooms”. I believe what will follow will most likely be a continuing decline in numbers of customers for UK new issues, further decreases in the market rates for modern mint stamps for postage (which reduces the value of my existing stock), and the increasing risk of adverse publicity. Adverse publicity, come the day that somebody in the mainstream media catches on to the story that most modern British stamps and first day covers lose much of their value as soon as you buy them, will severely effect Royal Mail, and have a knock-on effect on the stamp trade and the hobby in general.  I’m getting off the sinking ship. To those still aboard; good luck. Like many others, I think I’ll stop trying to throw lifelines to Royal Mail. They just don’t seem to understand their own peril.  The time and capital we save we will try to spend on traditional stocks, traditional business methods, and traditional service.  Robert Murray  [We will continue to service standing orders until the end of 2009. With immediate effect we are no longer keeping stocks of the new UK issues, but will handle them on the secondary market (i.e. we will buy, sell, and auction them second-hand.]

 
Let me tell you in more detail what had happened before I wrote that letter.

 Royal Mail held a meeting in May of 2009, at their philatelic headquarters in Edinburgh. A group of Key Accounts dealers attended, and were welcomed by Tallents House staff, including Steven Thompson (Key Accounts Manager). We had a useful introduction and a tour round their impressive operations, followed by lunch and discussions. I had decided before I went that this was going to be a key meeting for my own business decisions. (In advance of it, I had subjected some of my customers – regular buyers of UK new issues – to quite thorough interviews on the subject.)

The discussions covered many areas, but I will limit myself here to the areas that affected my own position. There were three main points I brought up.

{1} Royal Mail told us about how they were making efforts to break into new markets overseas. Increasing their customer numbers might allow them to cut back a bit on issue numbers and costs. I told them that my view was that they were trying to sell a bad product. (They didn’t like that !)  I told them that I thought they should make their product more saleable before they go trying to sell it.

I warned them of what I called “The Ratners Moment”, when somebody stands up in public and says “This stuff isn't very good”.

{2} I tried to convince Steven Thompson that he could personally be the person that could turn things around, and not only in the UK. I suggested that if he could convince his bosses of how serious the position was, and that the only way of saving their existing business was to cut back, then maybe they could arrest the decline. I suggested even that this could be something where he could give a lead internationally. The UK has a history of being at the centre of world stamp history. Perhaps we could lead again ?  If Royal Mail seriously changed its stamp issue policy, how many other major countries would follow ?

For the Key Accounts Manager to take these proposals to a more senior level would have been very bold. It might also have been a move that would be suicidal in career terms. However, I felt it was a move that had to be taken.

{3} I made a suggestion, which was backed by written proposals, that Royal Mail might create a new category of trade customer. Bear in mind that the network of Philatelic Counters in post offices has been dwindling, and that the level of service in those remaining is often reported as being poor. Be aware of the fact that stamp shops find it increasingly difficult to stay open, and that new shops are a rarity. Remember that many mildly interested stamp collectors find it difficult to get new stamps from local post offices.

My suggestion was that stamp shops be allowed to apply to be appointed as official Royal Mail Philatelic Outlets. The stamp dealers would have to meet strict requirements on stock control, staff training, record keeping, customer service, and so on. The Post Office would give better discounts, better sale-or-return facilities, sales support material, and would list these outlets in their publications. Royal Mail’s stamps would enjoy extra sales and higher visibility. The dealers would enjoy extra profits and promotion. Who could lose ?

(I also followed up with another argument, not put forward at the meeting, explaining the way in which an excessive issuing policy leads to people stopping their orders. That while someone is currently collecting, of course they don’t sell their collection. But that once the collection becomes stagnant there is a much higher chance of it being sold. It is quite easy now for a straightforward modern UK collection to have a face value of £1,000. A thousand collections coming on the market is a million pounds of postage material, for which Royal Mail have to provide a million’s worth of postal service for no new income.)

 At the end of that meeting I had hopes. I didn’t know how much effect the arguments had made, but I certainly didn’t feel that they had fallen on deaf ears. Over the following months there was a fairly slow communication from Mr. Thompson, but I still had hopes. Eventually in October I got an email from him that said that we would not be able to proceed with my suggestions at that time. On first reading I understood the email to mean what it said. On reading it again later I realised it probably meant that they wouldn’t follow up the proposals at any time. The next day I realised it probably meant that they simply didn’t understand the situation. That was when I decided that I had had enough.

 The Later View

So where does that leave us ?  Has anything really changed ?

Yes, I think that in future years we will look back at 2009/2010 as the time that the market in modern UK stamps took a serious turn. My own actions have not precipitated that turn, or even seriously affected them. I'll only say that I have hopefully judged the right time by being able to read the writing on the wall.

There's been a fair bit of coverage in the retail stamp press of the news that myself, and Rushstamps, and other dealers are moving away from current UK. Without doubt this coverage has pushed some individual collectors to cancelling their orders with Tallents House. I hate to think what it is like there right now. Of course they can't say so, but I'm sure they are probably currently experiencing the strongest flow of cancellations in their history. If they follow their current practices, they must be looking at ways of issuing even more.

 And what happens now – how is this going to affect us ?

I anticipate (and on some of this I may be wrong);

{1} There will be further increases in numbers and costs of UK stamp issues.

{2} This will be mirrored by further decreases in numbers of ordinary collectors of these. I understand that it is not too many years since the Post Office's standing orders were for about a quarter million of each first day cover, and that the present number is in the region of 100,000. I would not be surprised if that were halved in the next two or three years.

We already hear of local Post Offices where it is virtually impossible to get actual stamps put on packages, because they prefer to use the system-generated white labels. I have a strong suspicion that there are already Sub-Post Offices where they do not even put the new special issues on sale, but just keep them for a while before sending them back.

{3} The viability of some of Tallents House's products will become borderline due to reducing sales numbers, or the increasing costs of promotion in order to find new customers. Profits will be squeezed, which might lead to further price increases, or to some lines being abandoned.

{4} Increasing numbers of collections will come onto the market, causing a further depression in market prices. (Do you deal in “postage” ?  I used to pay 28% below face, put it down to 32%, and am now down to 40%. I can see “half face” on the horizon.)  Many collectors will say nothing about the disappointing price they have received, especially if they feel embarrassed by their own bad judgement. Some however will tell their friends, and spread the bad news.

{5} Some dreadful day, we can expect some very bad press. There was an article in the Telegraph (2 January 2010) by Simon Heffer, which was surprisingly balanced. To précis it to the extreme he wrote “Stamp collecting is fine, and it’s a good hobby, but Royal Mail’s current stamp issues are rubbish, and I can’t understand why anybody would collect them.” 

The dreadful day will be when the less balanced journalist - the one who doesn’t understand, the one who is happy to make cheap jibes, the one who does not properly research – tells the newspaper-reading-public that stamp collecting is dead, that nobody with any sense collects anymore, and that if you buy stamps the only thing you can be guaranteed is a loss.

When that day comes, comrades, we have to be ready to fight.

{6} In the very long term, I anticipate stamp collecting surviving, but in a new shape, where the majority of collectors are oblivious to what goes on in the new issues world. Where Royal Mail, if it still issues stamps, certainly has little interest in being involved in stamp exhibitions. Where many stamp dealers will simply not deal in any stamps issued after (say) 2009 (or maybe 1970 ?). Where valuers and auctioneers are well practiced in the gentle art of telling people that their modern stamp issues are virtually unsaleable, because they are not really postage stamps and because real stamp collectors do not collect them.

 It was ever thus. Stand still and die. Or change with the times. I believe there is a strong future for philately, but part of my facing the future includes saying “goodbye” to Royal Mail.

 Copyright Robert Murray 2010