Royal Mail has announced it will invest around £1.8 billion in UK over five years.
As part of the plan, the Company is introducing a second delivery for parcels that will expand in line with demand and be fully operational by 2023.
This second delivery will consist of Next Day parcels, typically purchased online from retailers the evening before, and larger items more appropriate for van delivery. In many cases, the delivery will be less than 24 hours after the order is made.
In order to achieve the second daily delivery, three new fully-automated parcel hubs will be built, representing a significant investment in the regions in which they are located.
Customers will continue to receive a delivery of letters and all other parcels earlier in the day via Royal Mail’s network of postmen and women.
In another plan element, Royal Mail will collect returns from customers at their home, including both consumers making returns and small marketplace sellers fulfilling sales. Royal Mail will also offer a range of in-flight redirection options where consumers are not going to be at home when their parcel is scheduled to arrive.
The aim of the investment programme is to focus on customer service improvements, digital initiatives, network enhancements and new ways of working to deliver more productivity and efficiency. This initiative will help fund the UK’s Universal Service.
To support the delivery of its strategic goals, including the investment to transform the UK business, Royal Mail is rebasing the dividend and changing its dividend policy. It said: “This is not a decision taken lightly as we understand how important the dividend is to our shareholders. The Company has sought to find the appropriate balance between investing in the future sustainability of our business and shareholder returns.“