Quarterly volume update

Dear Colleague,

For the duration of the Covid-19 pandemic, we will be providing quarterly updates on volumes in Royal Mail and GLS. 

As you all know, our business is facing some serious challenges. Covid-19 has accelerated many of the customer and market trends that we have seen for many years – fewer letters, and more parcels.

I have been out visiting many offices in recent weeks.  I have seen first-hand the impact these trends are having on our day-to-day working. 

I have seen many offices where we have much higher volumes of parcels due to people shopping more online. Postmen and women have been telling me that the number of letters they are delivering every day has fallen considerably during Covid-19. 

It is very clear that we need to adapt more quickly to the growth in parcels, and the decline in letters. 

I know that many people are keen to understand whether, as we start to exit some of the lockdown measures across the UK, we will start to see a change in the parcels and letters mix. People can see the trends in their own offices, but want to know whether those trends are reflected across the whole business.

Quarterly volume updates during Covid-19

Our first update, which covers 30 March - 28 June 2020, shows that volume trends for the quarter overall are broadly unchanged from the update provided in the full year results published on 25 June.

As the UK starts to come out of lockdown, we are not seeing any change as yet in customer behaviour. Our customers are wanting more parcels delivered to their homes and are sending fewer letters:

• Parcel volume up 38 per cent year on year (117 million more parcels).
• Domestic account (ex. Amazon) parcel volume up 64 per cent.
• Addressed letters (ex. elections) volume down 33 per cent (788 million fewer letters).

I believe that we need to be clear and transparent about the changes that are happening in our market, and the impact this is having on our company. I hope you will find this information useful.   We will provide a further update on second quarter volumes in October.

Kind regards,

CEO, Stuart Simpson