Maybe the U.S. Postal Service is finally trying to give catalogers a break. The USPS announced Feb. 10 that price increases for Standard Mail Flats — the category affecting most catalogers — would stay below the Consumer Price Index (CPI), or rate of inflation.
The average increase for the Standard Mail Flats is 2.3%, says USPS spokesman David Partenheimer, while the average rate hike for Carrier Route Flats is 4.3%.
Postal rate hikes are now capped to the CPI, which was 3.8% for 2008. The 2.3% increase, which takes effect May 11, is higher for catalogers than last year’s average of 1%, but less than 2007 when rates rose 20% to 40%.
Chris Bradley, president of bedding merchant Cuddledown, says he’s pleased with the relatively low increase, which he attributes in part to the work of the two-year-old trade group American Catalog Mailers Association.
ACMA executive director Hamilton Davison agrees, noting that the perception in Washington is that “catalogers fared much better than others. Our initial assessment is that catalogers got an increase about 1% lower than those levied on other mailers.”
Still, mailers such as David Kravetz, cofounder/catalog and Web team leader for food gifts cataloger Fairytale Brownies, view the increase as “more bad news” for catalogers. How will it affect Fairytale’s business?
“We’re just now starting to project for the fall 2009 circulation, so it’s a little early to tell what we’ll be doing as far as the overall numbers,” Kravetz says. But the cataloger has been aggressively looking to reduce mailing costs.
Kravetz says the company will take a close look at prospecting to cut back on the poor performance lists; it might go with four catalogs in 2009 instead of five; and it will consider flat or reduced circulation to concentrate on profitability rather than growth for the next year.
Indeed, any increase in this economy is potentially crippling, Bradley says. Consumer confidence and spending are at all-time lows, and catalogs need lower costs to start prospecting again.
“We’re all cutting our budgets, and so are most of our suppliers, but the USPS is still unable to get its costs under control,” Bradley says. “I expect that this increase will contribute to the decline in catalog mail volume that we’ve seen since the big [postal rate] increase in 2007.”