Royal Mails big earner on the slide

Royal Mail managers fear that the number of letters being sent during the vital Christmas period is down on last year, posing questions about a fast turnaround of the loss-making group.

Managing director of mail services Jerry Cope told senior executives last week mail volumes were down on last year by more than 5 per cent. Executives voiced fears that Christmas post was being replaced by email and that business volumes were down.

A senior Royal Mail source said: ‘Cope was absolutely clear that the figure would be down. The point was that at this stage [last week] Christmas is not doing as well as last year.’ The final result could be as much as 7 per cent down.

However, the official line is more upbeat, with a Royal Mail spokeswoman insisting that volumes were in line with last year, and that the company was hoping to meet the total 2bn deliveries achieved over the 2001 Christmas period.

Christmas is vital for the Royal Mail, at present losing about pounds 1.1m a day, with typical daily volumes increasing from 89m items to 120m. Chairman Allan Leighton is one year into a three-year strategy involving 30,000 redundancies, a shake-up of post offices and more products. Last week he appointed former FA head Adam Crozier as chief executive and Elmar Toime, former New Zealand Post head, as deputy chief executive.