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Main Street retailers face yet another competitive hurdle thanks to a new deal penned by the United States Postal Service.
No, not the good folks at the Local Post Office, this threat come straight out of Washington D.C.
The Postal Regulatory Commission recently approved a multimillion-dollar deal granting deep discounts to Valassis, one of the nation’s largest direct-mail marketers.
This deal will allow national advertisers to force-mail their advertising flyers at steep discounts that no other postal customer can get.
Certainly this deal will hurt many big city newspapers across the country at a time when these newspapers are already under extreme economic pressure. And, in the interest of full disclosure, it could also have a slight negative impact on this newspaper, as well, as national advertising makes up less than five-percent of our total annual sales.
The fact that this newspaper’s prices for inserting advertising flyers is significantly lower than the discounts given to Valassis will also limit negative impact to the newspaper from this deal.
However, the impact on independent Main Street retailers that cannot qualify for these discounts will be far more chilling. National chains will have a distinct advertising advantage over Main Street retailers that just isn’t fair.
Don’t think this will affect us here? Think again.
In attempt to reconcile its staggering losses, the USPS is going to help national chains compete against local downtown merchants. And that, quite honestly, just isn’t fair.
We certainly understand the dilemma that the USPS faces. They are looking at losses of over $11 billion in the first three quarters of 2011-2012. Best-case scenario, this new scheme with Valassis is only expected to bring in a paltry $15.6 million in profits during the three-year contract.
And what cost?
It is not the Postal Service’s job to choose winners and losers in an already tough economic environment.