Year: 2005

The Royal Mail, which yesterday announced that it had had a record Christmas, has threatened to sue Postwatch, the consumer watchdog, for advising customers to send letters second class during the festive season.

Angry correspondence has been exchanged since Peter Carr, Postwatch’s chairman, told customers that paying seven pence more for a first-class stamp was a waste of money.

The Royal Mail, which will this year pay Postwatch’s pounds 10million running costs, is understood to have demanded a retraction of “inaccurate information”.

The dispute centres on Royal Mail’s decision to exclude December from its performance figures. Postwatch thinks consumers should know how the Royal Mail is doing all year.

It is a significant boost to plans by Allan Leighton, chairman, and Adam Crozier, its chief executive, who are striving to make Royal Mail more commercially driven to fight off competition from the private sector.

The state-owned postal group said yesterday it had made Pounds 800m in revenues over Christmas, Pounds 80m more than in 2003, with the growth of internet shopping helping to fuel a rise in mail volumes.

Royal Mail delivered 2.2bn items of post in the run-up to Christmas, 100m more than in 2003. About 55m items were sent by internet retailers, it said, led by Amazon.com and eBay.

As well as a growth in sales at Royal Mail, loss-making parts of the business such as the Post Office and Parcelforce also achieved better results over Christmas. Revenues at the Post Office rose by Pounds 17m in December, Royal Mail said, in part thanks to a move into financial products.