Home Business NewsBusiness The key problems plaguing Royal Mail’s progress

The key problems plaguing Royal Mail’s progress

by LLB Reporter
14th Oct 22 10:36 am

It may have changed its name, but old problems remain for the company formerly known as Royal Mail.

The now incredibly prosaically named International Distribution Services, which still operates as Royal Mail in the UK alongside its international parcels division GLS would, you’d like to think, lean into an identity with so much heritage. It says a lot about the challenges it is facing that it wants to ditch all that history.

AJ Bell’s Russ Mould said: “For years the company has been fighting a battle against a heavily unionised workforce to deliver efficiency improvements and the relationship between staff and management is now at an all-time low following the recent strikes.

“To what extent the threatened redundancies represent brinkmanship to prevent further planned industrial action is an open question, but regardless the whole episode is hugely damaging to the business.

“Royal Mail has singularly failed to take advantage of the momentum provided by a big increase in parcel volumes during lockdown and arguably could have done more to secure the goodwill of employees who were effectively frontline workers during the pandemic.

“Arguments at the time of its privatisation that it had somehow been sold off on the cheap will now stick in the craw of anyone who invested at the initial 330p per share.

“Focus may turn to a demerger of the two businesses to allow the better-performing GLS business to thrive as a standalone entity – something the wider group has mooted and which shareholders may now be keen to push for.”

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