Neville Hobson

Royal Mail at a loss

The cost of sending a first class letter in the UK will rise by a record 5p from April as stamp prices are hiked to 46p, reports the Telegraph.

Moya Greene, Royal Mail‘s chief executive, said she regretted having to push up prices, but the cost of sending a letter in the UK was among the lowest in Europe.

She said: “We have thought carefully about these increases as we are conscious of the difficult economic circumstances our customers are facing. No-one likes to pay more and we regret having had to take these tough decisions on pricing. With the sharp declines in mail volume, our revenues are falling. That means if we don’t generate more income, we will simply not be able to keep funding our six-days-a-week collection, sorting, transport and delivery operation.”

Royal Mail said last year it lost £163 million on stamped mail, equivalent to a 6.4p loss on average on every stamped item it handled.

Excuse me if I’m missing a fundamental point here, but doesn’t the notion of a price hike like this when your market share is in a trending decline and there are many alternatives available to the services you provide seem a bit suicidal?

Still, the Royal Mail does do a nice line in picture stamps as this year’s Christmas ones featuring Wallace and Gromit show.

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