Royal Mail ‘could save up to £225m a year if deliveries cut to five days’

Cutting letter deliveries from six to five days a week would save Royal Mail up to £225 million a year and still meet the needs of most residential and smaller business customers, according to new research.

A s tudy by commun icat ions regulator Ofcom indicated that delivering letters on Monday to Friday would reflect postal users’ “reasonable needs”.

Separate surveys among thousands of residents and almost 1,000 businesses found that the current six- day- a- week letter de l ivery requirement meets the needs of 98% of residential users and 97% of small and medium businesses (SMEs).

Reducing this to five days a week, but leaving all other elements of the service unchanged, would still meet the needs of 97% of residential and SME users, and would potentially allow Royal Mail to make net cost savings of around £125m to £ 225m a year, said Ofcom’s report.

Under legislation, the universal postal service requires Royal Mail to deliver letters six days a week (Monday to Saturday) and parcels five days a week (Monday to Friday) to every address in the UK, at a uniform price.

Ofcom said it carried out a comprehensive review of the needs of postal users across the UK , with the marke t continuing to change rapidly, to see if the deliver y requirements Royal Mail has to meet still reflect what people and businesses want.

The report said Royal Mail continues to face “significant” financial challenges and this saving alone would not be enough to ensure the longer-term sustainability of the universal service.

Lindsey Fussell, Ofcom’s ne tworks and communications group d i r e c t o r, said: “Our research suggests that people’s needs would still be met if letter deliveries were reduced from six days a week to five.

“It would ultimately be for Parliament to decide whether this change is needed. However, Royal Mail must still modernise and become more efficient, to keep pace with customers’ changing needs.”

Keith Williams, interim executive chairman of the Royal Mail Group, said: “Times may have changed a lot, but the universal service remains vitally important.

“With changing user needs, which have been accelerated as a result of the pandemic, there is a clear need to move with the times.”

He added: “We will consider Ofcom’s findings very carefully.”