Postal group points out that new 50p second class rate will still be lowest in Europe
Royal Mail has defended stamp increases coming into force on Monday, pointing out that the new 50p second class rate will still be the lowest in Europe.
The price is rising from 36p, while first class stamps will increase from 46p to 60p, which will be in the bottom half of most prices in other European countries.
Chief executive Moya Greene said the new prices were “incredible value for money”, with first class stamps about half the cost of posting letters in France and Germany.
A Royal Mail spokesman said: “Raising prices is never easy. It is not a decision we have taken lightly but regretfully we have had no choice but to do so. We have thought very carefully about the impact on our customers and on our own business.
“We need to secure the future of the universal service. Ofcom [the postal regulator] has said there is a real risk to the universal service. They also found price controls failed and there is a need for material increases to ensure its viability.
“Royal Mail has made a loss in its core mail business, including packets, of almost £1bn over the last four financial years. That is not a sustainable position for any business.”
The postal group said it provided one of the highest quality postal services in Europe, with its next day target of over 90% the highest of any major European country.
“UK stamp prices are amongst the best value in the EU. The price of a stamp in the UK is lower than the average price across Europe in five of the six weight steps available for first class and second class mail. In the 51g to 100g weight band, the new 50p price of a second class stamp will be the lowest in Europe.”
The spokesman said stamped mail accounts for 12% of total mail volumes and any reductions in consumer sales would not necessarily apply across the entire mail market.
He said deliveries were already declining by about 5% a year although e-commerce was driving growth in packet delivery services, and stressed that the company believes the stamp price rise will create a “positive benefit”.
Millions of people on benefits will be able to buy stamps this Christmas at last year’s prices.
Post offices reported cases of bulk buying of stamps after the price rise was announced a month ago, but the Royal Mail said there was no shortage of stamps for consumers or businesses.
Adam Scorer, director of policy and external affairs at Consumer Focus, said: “From today, consumers will have to decide whether the increased price of stamps is going to change their posting habits.
“We have welcomed a cap on second class large letters and small parcels as it will help soften the blow of stamp price rises for vulnerable consumers and small businesses.
“The economics of Royal Mail meant that something had to give to keep the six-day delivery universal service obligation. Consumers will have to pay more to put Royal Mail on a more sustainable footing. But the onus shouldn’t be all on consumers.
“Royal Mail knows that it cannot just rely on price rises to make a better return but must also deliver greater efficiencies throughout the entire business.”
Royal Mail delivers about 59m items a day.