Royal Mail hits ‘significant’ headwinds to raise prices and reduce costs

The Royal Mail says that in the face of rising inflation, prices must rise and costs must be reduced.

The company warned that it was seeing “significant headwinds” from rising costs, including wages, energy and fuel.

The Royal Mail has revealed that it aims to save খরচ 350m in its current financial year in an effort to strengthen its position, but did not say whether the plan would threaten jobs.

Inflation is advancing across the UK economy.

The consumer price index reached its highest level in 40 years in April, it was announced on Wednesday, as the cost of living crisis has deteriorated.

Royal Mail has already increased the cost of posting letters by about 7% on average and the price of parcels by about 4% on average.

But it faces numerous threats from rising costs, including the failure to agree to a pay agreement with the Communication Workers Union (CWU), which opposes the move the company seeks to implement as part of its transition program to a parcel-centric business.

The union said it did not want a “string-linked pay rise” for Royal Mail employees because the company could afford it after posting a consistent operating profit of £ 758m for the year from March 27.

Shares in the open market fell more than 7% amid rising global inflation-centric sell-off.

The Royal Mail said in its results statement: “We are at a crossroads now. We need to facilitate faster change to deliver sustainable growth.

“We have already made significant operational changes, but it needs to accumulate real skills that will provide financial benefits next year and beyond.

“The delivery of our existing agreement and the successful transition to the next agreement, as part of the current negotiations with CWU, will be the key to future profitable growth.

“We have offered our people a significant salary that will enable us to make the changes we need to maintain our competitiveness, growth and secure our jobs for the future. Our market is changing rapidly, and agility is important in our response. “

Simon Thompson, chief executive of Royal Mail, added: “As we recover from the epidemic, we need to accelerate the transformation of our business, especially in delivery.

“Our future is as a parcel business, so we need to adapt to the old ways of working designed for the letter and do it faster in a world of increasing dominance by parcels.”

He added: “Our focus now is to redesign this British icon for our people and the next generation working with our trade unions, so that we can give our customers what they want, grow our business sustainably and provide long-term employment.” Security for our great team.

“We don’t have time to waste.”

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