Royal Mail is set to hike prices and slash costs in a bid to offset soaring inflation – despite posting a rise in annual earnings.
The group cautioned over “significant headwinds” as it faces higher wage demands, surging energy and fuel costs.
It is cutting costs by more than £350 million to help mitigate the hit, but said it would also have to look at prices.
The group has already increased the cost of posting letters by an average of around 7%, and parcel prices by an average of about 4%.
The increases took the cost of a first-class stamp to 95p and a second-class stamp to 68p.
It came as the group reported an 8% rise in underlying operating profits to £758 million for the year to the end of March.
But it sees numerous threats from rising costs ahead, including the failure to agree a pay deal with the Communication Workers Union (CWU) which is opposing measures the company wants to implement as part of its transformation programme towards a parcel-focused business.
The union said it was seeking a “no strings attached pay rise” for Royal Mail staff on the grounds the company could afford it after posting adjusted operating profits of £758m for the year to 27 March.
Simon Thompson, chief executive of Royal Mail, said: “As we emerge from the pandemic, the need to accelerate the transformation of our business, particularly in delivery, has become more urgent.
“Our future is as a parcels business, so we need to adapt old ways of working designed for letters and do it much more quickly to a world increasingly dominated by parcels.”
He added: “Our focus now is to work at pace with our people and our trade unions to reinvent this British icon for the next generations, so that we can give our customers what they want, grow our business sustainably and deliver long-term job security for our great team.
“We have no time to waste.”
Post already costs more than a lot of greeting cards. At this difficult time will we have to cut back on sending cards?
Typical!!!