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We have thought carefully about the impact on our customers and our own business before deciding to increase our prices. We understand how difficult it has been for householders and businesses in the recent tough economic conditions.
Royal Mail has announced First Class and Second Class stamp prices from 31 March. In doing so, we have thought carefully about the impact on our customers and our own business. We understand how difficult it has been for householders and businesses in the recent tough economic conditions.
Stamp prices have not risen for two years. In order to provide a high quality, six-day-a-week, one-price-goes-anywhere Universal Service, Royal Mail must maintain a high fixed cost infrastructure, costing more than £7 billion annually. (3)
We are raising the price of a First Class stamp by 2p, going from 60p to 62p. Royal Mail, under the current regulatory framework, could have raised the price of a Second Class stamp to 57p. Instead, the price of a Second Class stamp will rise by 3p to 53p.There is no regulatory cap on the price of a First Class letter,
ALarge Letter First Class stamp up to 100g will rise by 3p to 93p; a Large Letter Second Class stamp will rise by 4p to 73p.
Royal Mail’s stamp prices are among the best value in Europe. The European average for First Class letters up to 100g is 67p. The European average for Second Class letters, up to 100g, is 60p.
Postal services remain affordable. Ofcom’s March 2013 report The affordability of universal postal services (4) noted that average weekly household spend on post is low, for example, less than one twentieth of that on other utilities such as telephone services, electricity and gas. Current ONS data (5) shows that spend on post is around 60p per week per household (2012 prices) across all households, which is around 0.1% of total consumption expenditure.
UK businesses which use meters also benefit from good value prices and discounts of up to 34% on stamp prices. In addition, nearly half a million business customers have accounts with Royal Mail which deliver greater savings still. The weighted average price rise across our consumer parcels portfolio (6) from 31 March will be 2.6%.
Stephen Agar, Royal Mail’s Managing Director of Consumer and Network Access commented: “We understand that nobody likes to pay more, especially in the current economic climate. Our prices remain amongst the best value for money in Europe, and we have the highest service specification of any major European country.”
(1). Survey based on OECD and Eurostat annual Purchasing Power Parity exchange rates for GDP in 2012 valid as of 16 January 2014. Most European operators charge up to three different prices for letters weighing up to 100g, therefore in order to examine international stamp prices on a more comparable basis the prices for different weight categories have been weighted together for each country using UK volume weights to provide a common currency average stamp letter price for items up to 100g. Royal Mail remains equal to or below average for 1c and 2c prices in all weight categories
(2). Germany, France, Spain and Italy
(3). Royal Mail Regulatory Financial Statement 2012-13 “Royal Mail’s statutory obligation as the designated Universal Service Provider drives the architecture and costs of the Universal Service mails network. Royal Mail has developed a network to enable it to collect, move and deliver mail throughout the country, to ensure it can offer a next day service six days a week to more than 29 million addresses throughout the UK on an overnight basis. The annual £7.1 billion cost of running this network is a result of the Company’s status as the UK’s sole provider of the Universal Service, which requires it to be able to visit every address every day”.
(4). The affordability of universal postal services – published by Ofcom 19 March 2013
(5). ONS Trends in household expenditure over time – published11 December 2013
(6). Consumer parcels includes stamped, franked and USO account parcels
Director of Media Relations
Royal Mail Group
020 7250 2468
Director of Consumer and Business Media Relations
Royal Mail Group
020 7250 2468
Royal Mail plc is the parent company of Royal Mail Group Limited, the leading provider of postal and delivery services in the UK and the UK’s designated universal postal service provider. UK Parcels, International and Letters (“UKPIL”) comprises the company’s UK and international parcels and letters delivery businesses operating under the “Royal Mail” and “Parcelforce Worldwide” brands. Through the Royal Mail Core Network, the company delivers a one-price-goes-anywhere service on a range of parcels and letters products. Royal Mail has the capability to deliver to more than 29 million addresses in the UK, six days a week (excluding UK public holidays). Parcelforce Worldwide operates a separate UK network which collects and delivers express parcels. Royal Mail also owns General Logistics Systems (GLS) which operates one of the largest ground-based, deferred parcel delivery networks in Europe.
Royal Mail’s Quality of Service report for the third quarter of the current financial year was published on 21 February 2014. It showed that Royal Mail was in line with its First Class delivery target, of 93% of letters and parcels delivered the next working day, after the first three quarters of the 2013/14 financial year. It was ahead of its Second Class target of 98.5 of this mail delivered within three working days. Royal Mail’s delivery targets are set by the Government and reviewed by the Ofcom.
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