Data protection hit for junk mail drags on Royal Mail’s volumes

ROYAL Mail has warned that new data protection laws have impacted the number of lucrative marketing letters being sent as businesses become more wary of bombarding customers with junk mail.

The postal service said volumes in its addressed letter business had fallen 6pc in the three months to June 24 compared to the same time last year, at the upper end of its forecasts.

Addressed letters have customers’ names on them and cost businesses more to send than generic letters simply addressed to a household.

Since the introduction of the Gen- eral Data Protection Regulation (GDPR) in May this year, consumers have been able to opt out of marketing emails and letters more easily.

Royal Mail said that “some customers remain uncertain about the application of GDPR”, which had hit the number of letters being sent. It added that “due to the potential impact of GDPR and, or, if business uncertainty persists” it expected the decline in its addressed letter business to “be at the higher end of the range of decline for 2018-19 and [it] may fall outside the range in a period”.

Royal Mail said that it was working with its customers to find solutions to help them send marketing mail within the regulations.

Ameet Patel, a senior analyst for Northern Trust Capital Markets, said: “We suspect the GDPR effect has only just begun and will likely accelerate as consumers realise just how easily they can opt out of junk mail.”

Overall, Royal Mail posted a 2pc increase in revenues for the threemonth period thanks to a stronger performance from its international parcels business, General Logistics Systems (GLS).

However, it did warn that GLS’S margins may be hurt by ongoing labour pressures in many of its markets.

Royal Mail issued the trading update ahead of what could be a fractious shareholder meeting tomorrow.

The company could face a revolt at its annual general meeting over the pay for its new chief executive Rico Back, who replaced previous boss Moya Greene earlier this year.

Shareholder groups Institutional Shareholder Services (ISS) and Glass Lewis have both criticised his base salary, which is 16.8pc higher than Ms Greene’s.

Royal Mail said that the higher pay helped offset other benefits that Ms Greene was receiving, including her pension.

Shares in the postal company ended the day up 1.8pc at 489.5p.