Royal Mail warns it will increase prices again

As Royal Mail strives to cover increasing costs, such as salaries, energy, and gasoline, parcel and stamp rates are set to rise again. The company claimed it will use "price rises and expansion strategies" to "mitigate" the costs. The company raised first-class stamp costs by 10p to 95p and second-class stamp prices by 2p to 68p earlier this year. 

The warning comes as Royal Mail warned that rising costs were causing "substantial headwinds." As a result, it will need to cut costs even further, raising its objective to almost £350 million from £290 million earlier.

A spokeswoman said: "We haven't made decisions on future prices, but we always carefully consider the impact on our customers and ensure that any changes help to secure the sustainability of the Universal Service." As the parcel sector becomes more essential than letter delivery, Royal Mail said it would continue to adapt the business to cope better.

Since the peak in 2004-05, letter volumes have dropped by more than 60%, and by around 20% since the epidemic began. During the pandemic, however, parcel delivery surged. 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."