Royal Mail price rises are coming as the company released their Full Year Results with a £758 million profit. They say that they will have to raise prices again as well as cut operating costs.
Royal Mail already have initiatives totalling over £350 million in savings but they say that this isn’t enough. Higher wages, soaring energy and fuel prices, and increase in Employer National Insurance, means that the 7% increase in the cost of posting a letter and the 4% increase in parcel postage just isn’t enough to sustain the business and keep profits rolling in. And that’s on top of the fuel surcharge recently imposed.
We are also looking to mitigate the above headwinds through price increases and growth initiatives. We have already increased domestic prices of our letter services by an average of c.7%, and parcel prices by an average of c.4%, in addition to the fuel surcharge.
– Royal Mail
Royal Mail also cite the speed with which consumer behaviour is changing and their roll out of automated parcel sorting machines as steps on their transformation programme.
Royal Mail price rises might make you tempted to simply switch your business to another carrier, but alternatives are facing the same cost increases and past history suggests that when Royal Mail price rises come into effect others also tend to edge their prices up. Royal Mail is almost seen as the default for pricing in the courier industry and while competition means Royal Mail have to remain keenly priced it’s also true that when parcel prices are hiked it gives room for major couriers to increase their prices.
None of this is particularly unexpected – the economy and inflation are in poor health due to the pandemic and war in Ukraine and things aren’t likely to get better any time soon. While we’re all facing the same energy, fuel, inflation and Interest rate rises in our own lives, businesses are under the same pressures.
3 Responses
Privatisation was a bad move. Thank you Mr Cable. Royal Mail’s main priority is now profit rather than service, same as all the former public utilities. Can we traders put up our prices 2 or 3 tines a year? Of course not.
Ridiculous. Constant price increases are killing online sales. Greedy.
Like it or not, Postie is not busy all day delivering letters and birthday cards that Joe Public has sent. Just look at your own post. What is it mainly? Statements, marketing, parcels. Stuff from businesses, in other words. So why should Royal Mail not make a profit delivering business related letters and parcels up and down the land?
Traders can put their prices up, however many times they need to.