Royal Mail at a crossroads as price rises and cost costs on the cards

Royal Mail today said it will need to raise prices and slash costs in the face of soaring inflation.

“Royal Mail had been making real progress with its turnaround plans, with the surge in parcel deliveries during the pandemic helping to lift a share price which had struggled since its 2013 privatisation,” said AJ Bell’s Russ Mould.

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“Now inflationary pressures are threatening to unpick that progress and have reignited troubles with its work force as talks continue to avert a potential nationwide strike.

“Pay increases can’t hope to keep pace with rising prices and demands for more flexibility from staff, including working Sundays, are unsurprisingly going down like a lead balloon.

“Chief executive Simon Thompson seems to be deliberately raising the stakes – describing the transformation of the company ‘at a crossroads’. The direction it takes next could determine whether the privatisation will ever be considered a success, particularly for long-suffering shareholders.”