The Royal Mail’s chairman has said the business was on course to be successful and make a profit despite criticism of letters being lost in the post and allegations of theft by staff.
Allan Leighton told the annual conference of the National Federation of Sub Postmasters that the move into banking was key to the success of the organisation.
Read MorePaul Jackson, chief executive of mail industry consultancy Triangle Management Services, has a stark message for small firms. He says the current disruption to the postal service is “a wake-up call”. “Small businesses should stop moaning and recognise the world is changing,” he says. “They have a bargain at the moment and that bargain will not last for ever.” Price comparisons supplied by the Royal Mail suggest that Britain’s flat-rate 28p first class postage for letters under 60g compares favourably with the price of similar services across Europe, the US and Japan. You would pay 37.8p minimum per letter in Germany, 35.3p in France, 48.1p in Italy and 36.6p in Japan. Mr Jackson says that in countries where the postal services had been opened up to competition, like Sweden, prices for small businesses had increased. “In the long term when competition enters the marketplace the small user prices will go up. They should think about using mail less.”
Read MoreThe Royal Mail never had to deliver its next day first-class letter service before midday. It just did. But small businesses have come to rely on invoices, legal documents and customer promotions arriving in the morning as part of the smooth running.
The fuss over the abolition of the second post is a nonsense for most firms as for them the service ceased years ago. Only 4pc of all the daily post was being delivered in this way before Royal Mail acted. What is more galling for small businesses is the apparent abolition of the morning post and, in some cases, daily post altogether.
Read MoreWhat is to be done with the Royal Mail? It hangs round the taxpayer’s neck like an albatross. And if a recent Channel 4 documentary is to be believed, it is even more doomed and lawless than we had suspected. There are rumours of fresh attempts to privatise it. That would help, if it were feasible. But is it?
The question is as much financial as political. At the operating level, the Royal Mail of course loses money: pounds 227m before tax last year. But as often with such organisations, much of the problem lies with an off-balance-sheet subsidiary which dwarfs the business itself – the pension fund.
Read MoreThe Royal Mail will say it is on track to make a GBP400m operating profit this year, triggering a cash bonus of at least GBP800 for each of its 200,000 employees, when it reports last year’s financial results within the next three weeks. Leighton has told staff that if the company makes profits of GBP400m for the year ending in March 2005, all staff, with the exception of himself, will receive the bonus. “We’re on course to make pounds GPB400m this year,” said an executive close to the company. “The payout to each of our 200,000 people will probably be GBP1,000.”
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