Royal Mail has warned ahead of another hike in the price of stamps as part of the ongoing cost of living crisis which is gripping the country. The organisation told people they could expect further increases when it comes to sending both first and second class mail.
The news comes barely a month after the previous increase which saw the price of first-class stamps rise by 10p to 95p, while second-class stamp prices went up 2p, to 68p. The group also revealed plans to ramp up cost-cutting measures in order to to tackle the pressures of soaring inflation, which currently stands between seven and nine per cent.
According to Bristol Live, Royal Mail said that they are facing “significant headwinds” from higher wage demands, surging energy and fuel costs. As a result it has revealed it will need to go further with cost savings, increasing its target to more than £350 million from around £290 million previously.
Royal Mail insisted it was not planning further job losses to meet the new target, having already announced in January about 700 management jobs would go as part of already announced cost-cutting aims. It said it was also keeping its prices under constant review to combat rising inflation, which comes after it recently raised the cost of posting letters by an average of around seven per cent, and parcel prices by an average of about four per cent, on top of a fuel surcharge.
The firm reported an eight per cent rise in underlying operating profits to £758 million for the year to the end of March. On a reported basis, pre-tax profits fell 8.8 per cent to £662 million.
Royal Mail said it hoped to meet earnings expectations for its UK business over the year ahead, if it can agree a pay deal with its union that is “broadly” in line with its current offer. Chief executive Simon Thompson told the PA news agency the group remains in “intense discussions” with the Communication Workers Union (CWU) as they look to agree on pay.
Thompson said the firm was already seeing “some impact” of the cost-of-living crisis on parcel demand and a “fall away from peaks” during lockdowns when shops were shut. But its figures showed UK full-year parcel deliveries still rose 31 per cent against levels seen before the pandemic struck, while letter mailings were 18 per cent lower on a two-year comparison.