Royal Mail hails best Christmas in four years

‘Marked improvement’ in performance as revenues rise but failure to reach target costs staff full bonus

ROYAL MAIL has hailed its best Christmas in four years after a “marked improvement” in performance during the final three months of 2023.

The postal giant reported a 21pc increase in parcel volumes while revenues were up 14.4pc in the third quarter as customers returned following crippling strike action. It comes after the company suffered 15 days of strikes in the same period in 2022 as workers walked out in a row over pay and conditions. Despite the improved trading, Royal Mail failed to hit targets that would have handed workers a bonus of £500.

It is understood that staff at roughly 1,000 delivery officers around the country received a bonus of some sort, but the national target was missed.

Martin Seidenberg, chief executive of parent company International Distributions Services (IDS), praised the “extraordinary efforts” of staff over the critical festive period. He added: “This has led to a marked improvement in both trading and operational performance for Royal Mail over Christmas and we have continued to win back customers. We need to build on this momentum.” However, Royal Mail is still battling to shore up its future after a decline in letter-sending hit both its finances and quality of service.

Revenues rose 3.8pc in the nine months to the end of the year as greater volumes were offset by increased costs due to inflation and higher pay following the strikes.

Royal Mail posted a £319m loss in the first half of the year but said it expected to break even for the full year once voluntary redundancy costs were stripped out.

The figures come after Royal Mail warned it may need a taxpayer bailout to stay afloat after letter volumes dropped from 20bn to 7bn over the past 20 years. Mr Seidenberg has warned that this number will drop to just 4bn in the next five years at the current rate of decline. Royal Mail is also calling for a relaxation of its universal service obligation (USO), which requires the company to deliver letters from Monday to Saturday.

Alongside financial difficulties, the postal service has come under fire for a deterioration in its performance.

The company paid out £26m in compensation to customers last year amid rising complaints, while in November it was hit with a record £5.6m fine after it failed to deliver more than a quarter of first-class post on time.

Royal Mail said it had started to see results in its new working policies after it reached a deal with unions. Sick absence, which has been a major issue for the company, was down by a quarter by the end of the year compared to 2022. It came as parent company IDS announced the appointment of Michael Snape as chief financial officer and an executive director on the board.

Mr Snape was most recently finance director at Boots. Prior to that, he was international chief financial officer of Tesco, while he started his career at Sainsbury’s and Waitrose.

He replaces Mick Jeavons, who will leave the company at the end of May.

21pc The increase in parcel volumes, while revenues were up 14.4pc, with praise heaped on staff over the festive period