Another day, sadly another price hike incoming and this time it's the Royal Mail. Royal Mail had already hiked the cost of posting letters by an average of around 7%, and parcel prices by an average of about 4% and now they'll cost even more.
How much will costs rise by? At the time of writing there's little info out there but these are the current costs:
Letter: 1st class 95p, 2nd class 68p
Large Letter: 1st class £1.45, 2nd class £1.05
250g: 1st class £2.05, 2nd class £1.65
500g: 1st class £2.65, 2nd class £2.15
750g: 1st class £3.30, 2nd class £2.70
Small Parcel 2kg: 1st class £4.45, 2nd class £3.35
Medium Parcel 2kg: 1st class £6.95, 2nd class £5.35
10kg: 1st class £7.95, 2nd class £6.95
20kg: 1st class £12.95, 2nd class £10.45
Royal Mail warns of parcel delivery price hikes in the UK
Simon Thompson, chief executive of Royal Mail, said: “As we emerge from the pandemic, the need to accelerate the transformation of our business, particularly in delivery, has become more urgent.
“Our future is as a parcels business, so we need to adapt old ways of working designed for letters and do it much more quickly to a world increasingly dominated by parcels.”
He added: “Our focus now is to work at pace with our people and our trade unions to reinvent this British icon for the next generations, so that we can give our customers what they want, grow our business sustainably and deliver long-term job security for our great team.
“We have no time to waste.”
Royal Mail Figures
- Group revenue performance driven by GLS; reported operating profit down 5.6% year-on-year; adjusted operating profit up 8.0% due to improved profitability in Royal Mail:
- Royal Mail revenue down 1.6% year-on-year reflecting changing consumer behaviour following removal of lockdown restrictions and lower international volumes, partially offset by growth in test kits; adjusted operating profit of £416 million, up 20.9%; adjusted operating margin up 90 basis points to 4.9%, due to benefits of restructuring and non-people cost saving programmes.
- GLS revenue up 4.4% year-on-year in Sterling (9.6% in Euros), driven by recovery in B2B volumes and freight, adjusted operating profit of €402 million, flat year-on-year (although down 4.5% in Sterling), with 8.1% adjusted operating margin (down 80 basis points), in line with expectations.
- Volume trends:
- Royal Mail: Domestic parcel volume (ex. international) up 31% vs. pre-pandemic period (2019-20); and down 7% year-on-year due to normalisation post lockdown restrictions. Test kits accounted for c.7% of total parcel volume in 2021-22. Addressed letters (ex. elections) volume grew 3% year-on-year following sharp declines last year; down 18% vs. pre-pandemic.
- GLS: Continued parcel volume growth of 4% year-on-year, driven by domestic and international, with a recovery in B2B volume.
- Royal Mail Transformation programme:
- £59 million benefits delivered from Pathway to Change agreement, low end of revised £55 – 80 million range; good performance in Processing; insufficient progress in Delivery.
- Achieved 50% parcel automation – North West hub on track to open in June 2022.
- Change agenda even more urgent and important: need to accelerate delivery and broaden scope.
- GLS: good progress in France and Canada, margin pressure in US. Addressing short term challenges to maintain trajectory: price & yield management, digitalisation and automation to drive efficiency. Generated c.€500 million free cash flow in first two years of Accelerate strategy vs. €1 billion target5 by 2024-25.
- Strong cash generation: £353 million in-year trading cash flow4 pre-IFRS 16 (2020-21: £614 million), including increase in capex of £257 million, mainly due to investment in vehicles, hubs and automation in Royal Mail:
- Royal Mail £178 million in-year trading cash flow pre-IFRS 16 (2020-21: £342 million).
- GLS £175 million in-year trading cash flow pre-IFRS 16 (2020-21: £272 million).
- New Group-wide ESG Principles aligned with UNSDGs; the Group has set out to reduce its GHG emissions to zero by 2045.
- Final dividend: Board proposing 13.3 pence per share; full year ordinary dividend of 20 pence per share, in line with policy.
- £400 million return to shareholders via share buyback and special dividend completed.
- Royal Mail 2022-23: assuming pay deal can be agreed broadly in line with current offer, and without material industrial disruption, current adjusted operating profit consensus of £303 million (as at 18 May 2022)6 sits within range of potential outcomes, with downside risk. Cost savings in excess of £350 million identified to mitigate macro-economic pressures.
- GLS 2022-23: high single digit revenue growth and operating profit €370 – 410 million.
- GLS Accelerate: Assuming rebound in GDP growth in 2023-24, target of €500 million operating profit in 2024-25 and €1 billion accumulated free cash flow by 2024-25 can still be achieved.
47 Commentssorted by
Don't eat, don't use power etc
They blame it all on the current crisis with Ukraine. When in my "humble opinion", it's simple profiteering by all parties. Yesterday I paid nearly £1.00 for a first class stamp. How much tomorrow?
Yesterday I was sending a parcel to Germany - Royal Mail price £38.05, DPD price £13.25
instead you get a service which is actually worse than it was 15 years ago and prices that are in some cases 4 times higher!
i was going to put in a claim for late delivery of special delivery item and have just noticed you only get 14 days to claim back for late delivery, what a joke!
they can be late delivering something, but you cannot be late! 14 days seems an unreasonably short length of time to make a claim when there is no reason why a longer time frame (28 days) should not be allowed and people do have other things to do. maybe i shoulld return the form via the royal mail that will allow the extra days in delay time!
a very one sided organisation that does not see things from the customers perspective. (edited)
1st and 2nd class means nothing to those sending us letters. It's about time they overhauled that.
The Royal Mail and Post Office are two different entities.
PO owned by HM Government Royal Mail privately owned
and about 5.5mi in a fossil car.
because the Chinese subsidise the cost of postage or shipping to the UK?
£303M, because the shareholders want to make more money
if you're breathing out carbon monoxide, better call 999 before you're dead! (edited)
Sorry Royal Mail, your delivery people are great but those that make the big decisions are wrong
First class isn't guaranteed next day. It's 1-3 days. Special delivery is guaranteed next day
Soon won't be able to breathe for tax on carbon monoxide emissions!
Shame they've changed their name as I used to refer to them as Herpes 😬
Could easily have been talking about trains
Feels like a lot of bandwagon jumping with these price increases
They are privatised now, and we all know how that pans out, prices up continually as shareholders/the market expect returns/growth.
Increase the price of stamps, price most customers out from sending mail.
Then appeal the USO everyone then gets a 3 day a week letter service with packet deliverys being the main focus over 7 days a week.
No real revenue in the letters, they will happily lose this business to then focus on mainly a packet operation.
Obviously it's wrong, but wake up everyone this is exactly whats going to happen.
Returns for faulty items remain free I'm guessing, charge is just for unwanted goods? I think the returns have to be free by law if the items are faulty but I'm happy to be corrected.
£2.85 is the online price for 2nd class and £3.35 is the post office price
And thats one of the reasons why i’m trying to convince the wife to sell up, take early retirement and move abroad with the kids…
Soon it'll be returns for many retailers, example Zara now charging for returns news article but maybe that's a whole new topic!
A total mess atm! (edited)
Don't work to such tight margins, if I don't make 100% profit I change lines.
Does nt sound to "vicious" to me.....
"While Royal Mail bosses plead poverty, the company turned a £758 million profit last year."
the poor old royal mail awww
the way i see the forumla: poor delivery times and service = less customers = less money/profit
their customer service is abysmal people have jumped ship to alternatives....
they dont want to deal with great unwashed (the customer) which is very evident from their website
if they put the customer first, they would be competitive
their atttitude towards customers is worse than it was 20 years ago, its like they hav been forced into a privatised business and expect people to just buy from them, they are riding on their reputation, their reputation is going downhill....
DHL managed to make Euros 5billion profit because they actually deliver on time no doubt... (edited)
Your way behind, GPO folded in 1969 and became Royal Mail
You can always use Hermes or evri as they are now known...
Royal mail are still one of the cheapest and most reliable delivery companies wether you like them or not.
Not sure when the come into effect yet, awaiting them to give us new pricing details.
A bummer for ebay (and other ) sellers though
Will close quite a few online businesses if costs cannot be passed on. With Chinese competition it seems we will not be able to rise prices.
Oh well no chance I use them much now. Before too long it will be cheaper to book Evri than pay to post a bluray with Royal Mail.
Naaaaah ya don't say!
Use Evri and deliver to the parcelshop for the buyer to pick up. It's a lot cheaper!!