Connect Group, the parent company of Smiths News, has announced it plans to close its Pass My Parcel service, which is used by an associated network of 3,000 retailers.

The service launched in 2014 providing collection and return services from local stores for online retailers such as Amazon, ASOS, H&M and Disney.

In its half-year trading update published yesterday (June 13), the group explained that margins for Pass My Parcel had ’further worsened’ in 2018 and the company now expects full year operating losses, prior to closure provisions, to increase on those incurred in 2017.

In a statement, Connect Group commercial director Stuart Godman said: “It’s hugely disappointing when a new venture doesn’t succeed, but the level of losses is unsustainable, and to continue would potentially compromise investment in our core news distribution service.

“We are in discussion with our key clients to ensure we can wind down operations in a professional and orderly fashion. It’s a complex task and we know it’s vital that our parcel shop retailers are kept fully informed. We’ll be contacting all our partners very shortly with details of our plans; in the meantime we will continue to service customer deliveries and returns as usual.”

Smiths News will be writing to Pass My Parcel retailers in the coming weeks to confirm next steps. Further details on the closure of the service will be confirmed at a Connect Group preliminary results meeting in November.

Mayur Patel, owner of Premier Saxon Fields Store, Andover, was shocked by the announcement, which means he soon won’t be able to offer the Pass My Parcel service in his store.

He said: ”It’s a big surprise as we do quite a number of collections of Amazon orders through Pass My Parcel. I’m shocked that the service isn’t viable becuase the deliveries are done by the same people that deliver the newspapers.

“We are now going to have to review everything again and look to replace the service. I think delivery services, on the whole, are getting bigger and are important to our store. They are so convenient for people to drop in and pick up a parcel.”

Commenting on the announcement, PayPoint parcel services director Gary Winter said: “We were disappointed by Connect Group’s decision to close the Pass My Parcel business. It is becoming harder and harder to run a standalone parcel click and collect service successfully. We’re already opening our Collect+ service to other carriers and brands and, in the current market, we expect more consolidation to take place.

“While there is understandable uncertainty amongst retailers, the value this service provides to consumers should not be forgotten. Offering a click and collect service is a vital and convenient service for consumers, and will continue to be an important driver of footfall for retailers. If you are running a store in a community that you think could benefit from Collect+, we would love to hear from you.”