Royal Mail is the UK’s sole designated Universal Service provider. Six days a week, to 30 million addresses, we deliver one-price-goes-anywhere letters and parcels.

We also provide a range of commercial services to consumers, sole traders, SMEs, large businesses and retailers and other postal operators who use our downstream network.

Some facts:

• Royal Mail listed on the London Stock Exchange on 15 October 2013 and is a FTSE 250 company

• In the last year, we handled 13 billion letters and around 1.3 billion parcels
• We employ 160,000 people across our Group, with 140,000 of them UK-based and 90,000 of them our ‘feet on the street’ network of postmen and women
• One in every 194 jobs in the UK is provided by Royal Mail
• Our contribution to the UK economy totalled £10.3 billion last year, in terms of value added.

Unfortunately, our UK business has not adapted quickly enough to changes in the marketplace. The coronavirus pandemic accelerated those trends, presenting additional challenges.

These challenges are reflected in our most recent full year results, published in June 2020 for the 2019/20 financial year, as we announced we’re losing around £1 million every day and expect to be materially loss-making in the UK this year.

Our strategy

Royal Mail needs to move from a letters business that delivers parcels, to a parcels business also delivering letters.

Our ambition is to build a parcels-led, more balanced, and more diversified international business.

We need to build a business that better reflects cultural shifts in the delivery market and the evolving demands of our customers – demands that have been accelerated by coronavirus.

We are:

• Continuing to address the key challenges posed by Covid-19 and our financial situation
• Accelerating the pace of change in the UK, working together with our unions
• Working with all stakeholders to ensure a financially sustainable Universal Service Obligation for the 21^st Century.

Automation is a key part of our strategy, with three new parcel hubs paving the way for a parcels-led network. These hubs will be in the North West, the Midlands and a third, yet to be identified, location in the South.

Parcels

For 2019/20, our parcel volumes increased by 37%. Revenue from parcels was up 28% and we delivered around 80 million more parcels than in the previous year.

These trends are why we need to move to become a parcels-led business.

• We are aiming for more than 80% of parcels to be machine sorted within five years, helping to improve the efficiency of our operation. We plan to install parcel sorting machines in our mail centres in the coming years
• Three new fully-automated parcel hubs will Next Day, large and small Tracked parcels with a separate van delivery handling these parcel deliveries through up to 300 larger delivery offices.

Letters

In our most recent update, we announced addressed letter volumes (excluding election mailings) declined 8% with total letter revenue down 0.9%.

Letters remain important to the business. We are optimising our letters product portfolio and pricing strategy. We are committed to a sustainable Universal Service to protect the value of letters to the business.