Royal Mail master plan for Sunday parcel boom

Royal Mail is paving the way for its first large-scale Sunday parcel delivery service as it enters an uphill battle with rivals.

Bosses have drawn up a “roadmap” that could boost its Sunday proposal tenfold in a bid to put the 506-year-old firm at the forefront of weekend online shopping.

The group hailed the plan as a “revolution” similar to the end of Sunday trading restrictions for shops in the 1990s. It would also mark an end to the frustration of days of waiting for packages to arrive after the weekend. end.

The strategy is part of chief executive Simon Thompson’s plan to transform the business and take market share from competitors such as Amazon, DPD and Hermes, now known as Evri.

Internet shopping has surged during the pandemic. But demand has waned with the end of lockdown restrictions. Royal Mail has also had to deal with decades of declining letter volumes as more and more mail is sent digitally.

Group commercial director Nick Landon said the plan was to stimulate demand for more weekend orders from shoppers and grow the overall parcel delivery market.

Royal Mail, like other carriers, offered a restricted Sunday service to around 75 major retailers.

But Landon said Royal Mail would this week open up the service to any retailer – creating a platform for stores of all sizes to provide the service to millions more customers.

This means online shoppers would have the option of ordering items on a Friday night or Saturday for Sunday delivery.

He said the scale of the Royal Mail service could make weekend shopping for Sunday parcel deliveries the norm. He compared it to the seismic transformation of the High Street in the 1990s, when shops were first allowed to trade on Sundays.

Landon added: “We are the largest parcel delivery company, and our ambition – and the reason we are building on this scale – is to be at the forefront of this for Sunday deliveries.

‘Order any day of the week and you know you can receive your item the next day.

“We are seeing a clear demand from consumers.

“The physical retail world has seen shopping seven days a week for the past 30 years. We see this opportunity for online shopping and delivery,” he said.

If demand meets expectations, Royal Mail will double the number of Sunday deliveries by the end of the year as part of the accelerated scheme. “What we’re doing today is making sure we can deliver scale. If more people want to use it, we can build it from there,” he said. “We’re trying to open that capability up to every business, to every consumer.

“So for us, this is the start of a revolution. This is our roadmap for Sunday to be a full delivery day. It won’t happen overnight. But that’s the first step.

Landon said the plan initially included its Tracked 24 “next day” service. But Sunday deliveries could then be offered as part of its other services as demand picks up – including its two-day and special delivery parcels, it said. Royal Mail’s share price has fallen 38% so far this year to £3.24 as revenue plateaued and profits contracted. There are growing concerns that fuel and labor costs will further squeeze margins.

The former public company is currently in heated negotiations with the unions over wages.

His offer – a 5.5 per cent pay rise if targets and conditions are met – is being contested by the Communications Workers Union.

The union wants an ‘unconditional’ pay rise in line with inflation – which is now expected to hit 10% by the end of the year If no deal is reached by the end of this month, the CWU announces that it will hold a strike ballot. A strike would be the first in nearly a decade. Royal Mail has also asked workers to commit to working Sunday shifts to meet the new service.

Landon said he was not part of the wage bargaining team, but he added that “the current deployment has been agreed with the unions.”

The pressure Royal Mail is facing on costs has sparked interest from ‘short sellers’ in recent months – with investors betting the share price will fall. But Royal Mail’s shares could find support from its largest shareholder, billionaire Daniel Kretinsky. He owns 21% of the shares.

Landon said the Sunday delivery plan so far hasn’t included letters, but added, “I never say anything.” I won’t say no to expanding to other services if I see market demand. To a certain extent it’s, ‘If you build it, they will come.’

“As we open this up to all retailers, this will eventually allow us to access around ten times the volume we handle for Sunday deliveries.”