NZ Post CEO defends closure decision as postage use plummets
NZ Post chief executive David Walsh said New Zealand had changed a lot since its last size change in 1989. Photo / Michael Craig
NZ Post’s chief executive has defended his decision to reduce the services retail footprint by over 140 stores, arguing that the country’s postal service has to respond to changing consumer needs.
The announcement made on Tuesday will see 142 stores and service counters close across New Zealand, leaving some customers 13km away from their next closest store.
Some stores set to be affected include Foodstuffs-owned Four Square’s, pharmacies, local dairies and bookstores, with the bulk of those stores in Auckland (29) and Christchurch (22).
NZ Post chief executive David Walsh said the decision reflected the broader story it has had to navigate for some time now.
“Our retail footprint in itself hasn’t had any size-change impacts since about 1989, so you can imagine that New Zealand has changed a lot in that time,” Walsh said.
“Quite simply, the way New Zealanders communicate just continues to change and evolve and NZ Post has had to keep responding to that change.”
The change follows an update to the Deed of Understanding, an agreement between NZ Post and the Government, which resets the minimum store requirements for the first time in about 40 years and allows the service to change its retail network.
The key change in the deed was a reduction in the minimum required number of postal outlets from 880 to 500, with a path to reduce the minimum even further to 400 in the coming years.
The Ministry of Business, Innovation and Employment (MBIE) started public consultation on the deed’s review over 18 months ago, and received over 1600 submissions.
Many expressed concerns that the proposed reduction would lead to a loss of service in rural areas and disproportionately impact rural businesses that rely on frequent delivery.
Walsh said the deed itself was quite clear about urban change over rural, with NZ Post taking the definition of rural from Stats NZ – of any area outside of delineated urban settlements, usually with a population less than 1000.
He confirmed that NZ Post had completed an expansive series of site visits late last year to identify who uses what site and why, and what choices the company would have under a new configuration.
“We did mapping and proximity of how close sites were away from each other. We then wanted to make sure we engaged with those retail partners to allow them to provide an expression of interest.”
Public reaction to the decision has been forthcoming, with some sharing serious concerns over the decision’s impact on those employed at the stores and the elderly.
“We are really aware of both the impacted partners in this and the communities. We know it’s not easy, it does impact people to go through the change process, but we’ve been quite purposeful about what we need to do and why,” Walsh said.
“That of course doesn’t make it easy for those people who have had a history of using a service in a certain way, but we also have to keep responding to the reality of how people are using the service.”
When pressed as to whether the closure of locations could have been completed over a longer period, Walsh said there had been a robust understanding as to the state of mail over the last few years.
The change of pace has ramped up for NZ Post, with Walsh saying that its parcel service now makes up roughly 65% to 70% of its revenue. Just five years ago, it was closer to half.
Data from the Ministry of Business, Innovation and Employment reflects the fall in postal usage, with addressed letter volumes consistently declining over the last decade to below 200 million, roughly a quarter of its level in 2012.
The decision to close stores will also make NZ Post’s network more manageable, and help it back on the path to profitability.
In the 2025 financial year, the service reported a net loss of $2 million, a $12m improvement on the year prior, but still in the red.
Walsh said the business was aiming to deliver a small profit for the 2026 financial year, but there were still six months ahead that needed to be carefully managed.
“There’s no doubt a tighter network with partners who have a bit more volume going through their sites will make it more effective and manageable for us.
“We’ll also invest some of that value back into ensuring that the sites that are operating are well-resourced. There will be some benefits there, not only financially, but there’s also the quality of service and accessibility that we’re conscious of.”
Walsh agreed the move would support the mandate of Minister for State Owned Enterprises (SOEs) Simeon Brown, who asked various SOEs in March last year to explain why they were failing to deliver their cost of equity and how they would improve their return to the Crown.
Minister for Media and Communications Paul Goldsmith said it was “blindingly obvious” that the way people communicate has changed dramatically.
“People send far fewer letters and so they have to adapt it, but the decisions that they make around how they make their business work is up to them,” Goldsmith said.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
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