U.S. Postal Service

In response to customer complaints about long lines at post offices and the lack of self-service areas for stamps and other items, the U.S. Postal Service has opened 23 retail stores since 1989 and has plans to open 20 more in 1994. These retail stores offer the same services as found at traditional post offices but boast more business and communication services, such as fax, E-Mail, and word processing, provided by commercial parcel and retail mail services. Fourteen of the 16 retail stores that had been in operation for at least a year were profitable at the end of fiscal year 1993; overall revenues were 2.5 to 6 times greater than operating costs. Not enough data were available to estimate revenues and costs for the other two stores. New store locations are chosen on the basis of customer need and convenience--the same criteria used to select traditional post office sites.

GAO found that: (1) 14 of the 16 retail stores reported annual gross revenues that were 2.5 to 6 times greater than operating costs in fiscal year 1993; (2) the Postal Service's retail stores offer the same services as those offered by traditional post offices; (3) the retail stores do not offer many of the business and communication services that are provided by private-sector establishments, such as electronic mail messaging; (4) the differences between traditional post offices and the new retail stores are only in physical layout and appearance; and (5) the Postal Service's procedures and criteria for selecting new store locations are based on customer need and convenience and are the same as those used in selecting sites for traditional post offices.