Royal Mail has signalled potential further increases in stamp prices following a £120million national insurance impact from the recent Budget. Martin Seidenberg, the chief of Royal Mail’s owning company, has also not dismissed the possibility of additional job cuts due to the rising costs.
“We are looking at all areas of the business,” he commented. This news comes as a hit to customers who have already seen significant hikes in stamp costs, with the price of a first-class stamp now at £1.65, a stark rise from 60p when Royal Mail was privatised just over ten years ago, reports the Mirror.
Mr Seidenberg, who heads up International Distribution Services (IDS), remarked that the policies introduced by Rachel Reeves in her first Budget last month will “hit us harder compared to our competitors”. With approximately 130,000 UK employees, Royal Mail argues that the increased expenses make changes to its universal service obligations which mandate six-day-a-week first-class deliveries even more pressing.
In response to queries about the potential effects of the £120million burden, Mr Seidenberg stated: “We are looking at a bunch of measures. It is too early to say but we will look at prices and cost efficiencies. I cannot rule out any price increases.”
Concerning the prospect of job losses, he said it was “too early to say” but did not exclude the possibility. He added that the company might consider boosting automation.
The Royal Mail is likely to miss delivery targets for letters and Christmas cards over the three months that include Christmas, he admitted. However, he assured that its performance over the festive period itself would be better than last year after recruiting thousands of staff.
Ofcom announced in September that it is contemplating allowing Royal Mail to abandon Saturday deliveries for second class letters as part of a consultation. This announcement came as IDS improved its profitability over the past half-year and celebrated progress in its major transformation plan.
The company has undergone a significant revamp which resulted in the cutting of thousands of jobs from 2022 due to industrial action impacting Royal Mail. IDS is currently awaiting approval for its proposed £3.57billion takeover by Czech billionaire Daniel Kretinsky. It reported an adjusted operating profit of £61million for the 26 weeks to September 29, up from a £169million loss a year earlier.