Royal Mail is to increase the cost of first- and second-class stamps for what will be the sixth time in little more than three years.
From 7 April, the price of a first-class stamp will increase by 5p, or 3%, to £1.70. The cost of the second-class service is going up by 2p, or 2.4%, to 87p.
In a statement Royal Mail blamed the need for price increases on rising costs. “We always consider price changes very carefully but the cost of delivering mail continues to increase,” said Nick Landon, its chief commercial officer. “A complex and extensive network of trucks, planes and 85,000 posties is needed to ensure we can deliver across the country for just 87p.”
A decade ago Royal Mail was delivering 20bn letters a year but that has shrunk to 6.7bn and could drop to 4bn within four years. Over the same timeframe the number of addresses it serves has risen by 4m, meaning the cost of each delivery continues to rise, it said.
Royal Mail was fined more than £10m in December by the postal regulator Ofcom for missing its delivery targets, as more than a quarter of first-class mail arrived late.
The postal service has been pushing to reduce deliveries, and Ofcom has given provisional approval to allow Royal Mail to deliver second-class letters on alternate weekdays and to stop Saturday deliveries. First-class letters would still be delivered six days a week under the plans. A final decision is expected in the summer.
“Ofcom has recognised that reform is urgently needed to protect the one-price-goes-anywhere universal service which requires Royal Mail to deliver letters to about 32m UK addresses six days a week,” Landon said. “Reform will allow continued investment in the modernisation and transformation of the business to provide a more financially sustainable service.”
The price rises come before big changes at the carrier. Its parent company, International Distribution Services, is being bought by the billionaire Czech energy tycoon Daniel Křetínský’s EP Group in a £3.57bn deal. However, clearance of the deal is being held up by regulators in Romania, where EP Group has investments.
EP Group had hoped to complete the takeover in the first quarter of this year. However, earlier this week the company said that while discussions with Romanian authorities had been “progressing well” and there had been no indication of any substantive problems that may stop clearance, the deal was now likely to be completed in the second quarter.
