Royal Mail to increase cost of stamps again

Struggling company battles plummeting enthusiasm for letters

Royal Mail is increasing the price of all postage stamps by 10p as the company battles plummeting enthusiasm for letters.
The price of first class stamps will rise to £1.35 from April, while second class stamps will cost 85p, the company announced today.
It is the second time in six months that Royal Mail has increased stamp prices. In October, the price of a first class stamp was increased by 14pc from £1.10.
Royal Mail said that letter volumes had fallen by more than 10 billion in the last two decades – from 20 billion in 2004 to 7 billion in 2023.
The increase comes despite Royal Mail being fined £5.6m by regulator Ofcom last year for failing to meet its delivery targets.
It comes as households face a barrage of price increases in April, with broadband, council tax, and water bills set to rise for millions.
Royal Mail said it had tried to keep price increases “as low as possible”, but added that the average adult now receives just two letters a week and spends less than £7 a year on stamps. The company made a loss of £419m last year.
Royal Mail also announced that prices would go up for sending parcels.
Increases for sending small and medium packages range between 8pc and 17pc depending on the weight band, while increases for special deliveries range from 15pc to 22pc. Franked letters will be unaffected, the company said.
Nick Landon, chief commercial officer at Royal Mail said: “We always consider price changes very carefully, but we face a situation where letter volumes have reduced dramatically over recent years, while costs have increased.
“It is no longer sustainable to maintain a network built for 20 billion letters when we are now only delivering seven billion.
“As a result of letter volume decline, our posties now have to walk more than three times as far to deliver the same number of letters as before, increasing the delivery costs per letter.”
In January, Ofcom unveiled a consultation paper which could allow Royal Mail to scrap Saturday postal deliveries. Reforms to the universal service obligation (USO) could also include overhauling first-and second-class delivery targets.
The company is currently expected to deliver 93pc of first-class post within one day of collection, and 98.5pc of second-class post within three working days.
But Royal Mail was found to have breached this requirement in November.
At the time, Ofcom said the company had “caused considerable harm to customers, and Royal Mail took insufficient steps to try and prevent this failure”.
A Telegraph survey revealed that almost half of Royal Mail customers had experienced delays in 2023.
Mr Landon has again appealed to the Government to overhaul the USO, following an unsuccessful bid last year.
He said: “It is vital that the universal service adapts to reflect changing customer preferences so that we can protect the one-price-goes-anywhere service, now and in the future.”
Royal Mail estimates reforming the USO could save the company hundreds of millions of pounds a year.
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