Royal Mail have just released their trading update for the first nine months of their financial year which finished on the 24th of December. The headline news is that parcels raised revenues as volumes showed strong growth.
This is fantastic news for Royal Mail in light of the threat of postal worker strikes and the CWU having threatened strike action in the second half of 2017. It shows that retailers held their nerve and stuck through the uncertain times with Royal Mail.
Parcel volumes were up 6%, with growth largely driven by a good performance in Royal Mail account parcels. Royal Mail Tracked 24®/48® and Tracked Returns® services saw continued strong volume growth of 31%. Total parcel volumes in the December trading period were 149m, up 6% over the same period last year. Parcelforce Worldwide volumes were up 2% helped by new customer wins.
At the same time the traditional addressed letter volumes decreased by 5% but this is no surprise and why Royal Mail are modernising – partly the reason that the CWU called the strikes due to Royal Mail wanting different working times for new posties. As consumers want to buy later in the day still with next day delivery, retailers need to offer later cut off times and Royal Mail need later start times for delivery routes to give time for parcels to arrive at local delivery offices.
“We remain the number one facilitator of e-commerce in the UK due to our significant investments to improve our customer offering… Given our performance to date, we expect to see broadly similar volume and revenue trends in UK parcels and letters for the full year as in the nine months. In GLS, we expect underlying revenue growth for the full year to be broadly in line with the first half.
We have continued to make progress in talks with our unions on pay, pensions and the other issues under discussion. We have agreed the fundamental principles on some of the key issues and talks are ongoing to finalise these and other areas. We believe we can reach agreement on an affordable and sustainable pension solution and a pay deal that will enable us to continue to innovate and grow.”
– Moya Greene, Chief Executive Officer, Royal Mail plc