Business reporter
Getty ImagesRoyal Mail can deliver second-class letters on every other weekday and not on Saturdays to help cut costs, the industry regulator has said.
Ofcom said a reform to postal service was needed as people are sending fewer letters each year, so stamp prices keep rising as the cost of delivering letters goes up.
The changes mean second-class letters will be delivered either on Monday, Wednesday and Friday, or on Tuesday and Thursday, in a two-week cycle.
Royal Mail welcomed the changes, will take effect on 28 July, saying they would support a “reliable, efficient and financially sustainable Universal Service”.
Under the current one-price-goes-anywhere Univeral Service Obligation (USO), Royal Mail has to deliver post six days a week, from Monday to Saturday, and parcels on five from Monday to Friday.
Ofcom says Royal Mail will have to continue to deliver first-class letters six days a week.
“These changes are in the best interests of consumers and businesses, as urgent reform of the postal service is necessary to give it the best chance of survival,” said Natalie Black, Ofcom’s group director for networks and communications.
However, just changing Royal Mail’s obligations will not improve the service, she said.
“The company now has to play its part and implement this effectively.”
Royal Mail estimates it will take 12 to 18 months to implement the changes across its network.
The regulator is also making changes to Royal Mail’s delivery targets.
The company will have to deliver 90% of first-class mail next-day, down from the current target of 93%, while 95% of second-class mail must be delivered within three days, a cut from the current 98.5%.
However, there will be a new target of 99% of mail being delivered no more than two days late to incentivise Royal Mail to cut down on long delays.
Royal Mail’s parent company, International Distribution Services (IDS), welcomed the Ofcom announcement, saying it was “good news for customers across the UK”.
Martin Seidenberg, IDS chief executive, said the changes follow “extensive consultation with thousands of people and businesses” to reflect their needs and the “realities of how customers send and receive mail today”.
However, consumer group Citizens Advice said Royal Mail had a “woeful track record of failing to meet delivery targets, all the while ramping up postage costs”.
Tom MacInnes, Citizens Advice director of policy, said Ofcom had “missed a major opportunity to bring about meaningful change”.
“Pushing ahead with plans to slash services and relax delivery targets in the name of savings won’t automatically make letter deliveries more reliable or improve standards,” he said
The regulator need to force Royal Mail to give “paying customers a service that delivers,” he added.
The number of letters Royal Mail delivers has fallen from a peak of 20 billion in 2004-05 to 6.6 billion in 2023-24.
However, the price of stamps has continued to rise. Since 2022, Royal Mail has hiked the cost of a first-class stamp from 85p to £1.70.
Despite pushing up prices, in 2023-24, Royal Mail made a loss of £348m.
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