Britain’s RoyalMail “must improve” its delivery performance, says communications regulator Ofcom, as it proposes changes to its second-class letter service. The proposals are meant to secure the future of the universal postal service, it says.
The regulator says: "We have been pressing the company on what it is doing to turn things around, and we are currently investigating its latest failure to hit its annual delivery targets. Regardless of how the universal service evolves, Royal Mail’s delivery performance must improve."
Ofcom has been examining changes to the universal service obligations (USO) – which compels the postal operator to deliver letters six days a week (Mon-Sat) and parcels five days a week (Mon-Fri) to every address in the UK.
Today it is proposing RoyalMail should be allowed to downgrade its second-class service, and no longer deliver letters with a 2nd class stamp on Saturdays.
Ofcom says today: "The evidence we have gathered so far also suggests people want a next-day service available six days a week for when they need to send the occasional urgent letter or card. However, people acknowledge that most letters are not urgent. If second-class letters continued to be delivered within three working days but not on Saturdays - and first class remained unchanged at six days a week - it would enable Royal Mail to improve reliability, make substantial efficiency savings, and redeploy its existing resources to growth areas such as parcels."
The proposal is likely to please Royal Mail. However, Royal Mail's parent company, International Distribution Services (IDS), says the USO needs to change. Cutting deliveries of second-class letters to just two or three days a week would save Royal Mail hundreds of millions of pounds a year.
Citizens Advice admits changes are needed – but should benefit customers, not just save Royal Mail money.
In other news … Another British institution, Primark, has been hit by the grizzly weather this summer. Itsowner, AssociatedBritishFoods, warned shareholders that like-for-like sales at the clothing chain have fallen in the last six months. Like‐for‐like sales are expected to decrease by about 0.5% in the six months to 14 September, driven by a 0.9% decline in the last three months.
While the cold and wet hurt Primark, electricals retailer Currys benefitted. Currys grew its like-for-like sales in the UK and Ireland by 5% in the 17 weeks to 24 August, partly due to England’s performance in Euro 2024, it says, as some families bought new TVs. Currys is also seeing interest in AI computing products.
The agenda • 9am BST: UK new car sales • 9.30am BST: UK construction PMI for August • 9.30am BST: Bank of England Monthly Decision Maker Panel data for August 2024 • 11am BST: Irish Q2 GDP and GNP • 1.15pm BST: ADP private US payrolls • 1.30pm BST: US weekly jobless claims
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