To start this post I'll repeat today' press release. As I find more about prices I will include it below.
A second post today concerns Post & Go activities.
Royal Mail Press Release - Stamp prices
1 September 2023
From 2 October 2023, the price of First Class stamps will increase by 15p to £1.25 due to increasing cost pressures, the challenging economic environment, and the lack of reform of the Universal Service Obligation (USO) despite the significant structural decline in letter volumes. The price of Second Class stamps will remain at 75p.
The new price of a First Class stamp is in line with European median prices, and Second Class stamp prices remain well below the median. Royal Mail has sought to keep price increases as low as possible in the face of declining letter volumes. Letter volumes have fallen from 20 billion in 2004/5 to 7 billion a year in 2022/3, while the number of addresses has risen by four million in the same period.
The USO – which currently requires Royal Mail to deliver letters to all 32 million UK addresses six days a week – is in need of urgent reform. Royal Mail has been clear that the cost of delivering an ever-decreasing number of letters to an ever-growing number of households six days a week is unsustainable. Ofcom’s own research in 2020 shows that that a five day a week Monday to Friday letters service would
meet the needs of 97% of consumers and SMEs. Given the ongoing decline in letters, Royal Mail continues to call on Ofcom and the Government to review and modernise the USO to better reflect changing customer needs.
At the full year results in May 2023, Royal Mail reported a £419 million loss.
Nick Landon, Chief Commercial Officer at Royal Mail said: “We understand the economic challenges that many of our customers are currently facing and have considered the price changes very carefully in light of the significant decline in letter volumes. Letter volumes have reduced dramatically over recent years, down more than 60% from their peak in 2004/5 and 30% since the pandemic. It is vital that the Universal Service adapts to reflect this new reality.”
As this says, Ofcom have already found that five-day letter delivery would satisfy most users:
• The current USO service levels, including the six days a week (Monday-Saturday) letter delivery requirement, meets the needs of 98% of residential users and 97% of SMEs in the UK.
• Reducing the letters service to five days a week (Monday to Friday), but leaving all other elements of the service unchanged, would still meet the needs of 97% of residential and Small & Medium Enterprise (SME) users.
• We found very little variation in users’ views on five-day letter delivery across the UK, including the four nations of the UK or how remote users’ locations are. Variation by other characteristics such as age, disability or whether users had access to the internet was also very limited.
• However, reducing the frequency of letter delivery to three days a week would have a significantly larger impact on users, meeting around 62-78% of SMEs and 79-85% of residential users’ needs.
• The evidence suggests reducing the frequency of letter deliveries requirement to five days a week would reflect users’ reasonable needs. It would also potentially allow Royal Mail to make net cost savings of around £125-225m per year in 2022/23 terms, assuming Royal Mail is able to realise these savings by modifying its operational delivery model.
(You can read the full Ofcom '2020 Review of postal users needs' here.)
Amid falling mail volumes, and worldwide reductions in mail deliveries, the crux of the matter is that Royal Mail appears to be trying to force the regulator (Ofcom) to abide by its own research and reduce the USO to 5 days a week, while the regulator will almost certainly be under pressure from politicians not to permit this. So blame the politicians.
One thing that would be necessary would a change in posting habits of the NHS, and any other organisation sending communications which could be time-sensitive. It is pointless sending appointment letters 5 days before the appointment by second class mail. More people need to accept reminders by text message (SMS) and more organisations need to embrace it.
Given the complaints that abound in the media, and on social media, many would say that they are only getting 3-day week delivery. And remember that many people would not receive letters every day anyway. There are days when we get none for the household, only for the business.
No news yet on changes for higher-weight items or premium, but we can assume we can confirm that 1st class Signed For will be £2.75, 2nd class SF stays at £2..25.
1st class Large will be £1.95 and 1st Large Signed For £3.45. The rates for 500g rise to that for 750g across the board, but the top rate is unchanged. At first sight parcel rates appear unchanged.
Special Delivery 100g rises 50p to £7.35, and 500g rises 50p to £8.15.
The new prices leaflet has now been made available for download here.
UPDATE 22 September 2023
In the same format as reported in earlier tariff posts, these are the changes in summary:
The 1st class inland letter rate will rise from £1.10 to £1.25.
The 2nd class letter rate remains at 75p, but the rates for large letters rise.
Small and Medium Parcel rates are unchanged.
-
1st
2nd
Letter
1.10
1.25
0.75
0.75
Large Letter – 100g
1.60
1.95
1.15
1.55
- 250g
2.25
2.70
1.85
2.40
- 500g
2.95
3.30
2.40
2.70
- 750g
3.30
3.30
2.70
2.70
The effect on sets of Post and Go stamps is an increase of 35p on the 1st class collectors set and 40p on the 2nd class collectors set over the April rates.
There rates for Special Delivery 1pm rise from £6.85 to £7.35 for 100g, and there are 50p increases for other weight steps.
The rates for Signed For are also increasing, the extra is £1.50 for 1st class Letters and Large Letters on top of the rates in the table above. Parcel rates remain unchanged.
The cost of Post Office Boxes is unchanged from the April increase at £330.
There are no changes to International Rates.
