Online shoppers boost Royal Mail parcel coffers

royal mail 2Fears of a slowdown in Royal Mail’s parcel business have been blown out of the water after the firm revealed it had delivered 130 million parcels across the UK in December – over 10 million more than last year  – as shoppers flocked online for Christmas.
In the nine months ending after Christmas, parcel volumes rose 4%, although Royal Mail did not have it all its own way; strong competition saw sales grow just 1%.
And, as they say, “the Internet giveth, the Internet taketh away”, with Royal Mail’s letter deliveries continuing to decline, falling 3% by volume and 2% by revenue. This is despite a slight improvement in the first half of the year, plus the added bonus of millions of election mailings.
The company did not provide a full breakdown of direct mail volumes and revenue, however.
Its European parcel business, GLS, performed well with sales up 10% on strong volume growth.
The company maintains it is on schedule to strip another 1% of costs out of the business. Last year, the group generated £9.3bn in sales, but £8.7bn worth of operating costs meant it made an operating profit of just £218m.
Royal Mail chief executive Moya Greene said: “Once again, our postmen and women delivered a great Christmas. This is because of the commitment of our people and our investment in additional temporary staff and sorting capacity.
“Extensive planning, which began in the spring, ensured we had the capacity to accommodate additional volumes from our retail customers and other delivery operators.”
“The performance in letters improved slightly over the first half, with addressed letter volumes, excluding elections, down 3%. We remain on track to deliver at least a 1% reduction in underlying operating costs before transformation costs in UKPIL for the full year.”

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