Royal Mail has missed its delivery targets once again but said it was making progress to meet the goals as it rolls out a major overhaul to scrap second-class post on Saturdays.
The group said it delivered 85% of first-class deliveries the next day and 91.4% of second-class mail within three working days during the first quarter of the year. Under targets set by Ofcom, 90% of first-class mail should be delivered the next day, and 95% of second-class mail should be delivered within three days. From April 1, the watchdog lowered previous delivery targets for first-class from 93% and second-class from 98.5% as part of universal service reforms.
Improvement from a year earlier
But Royal Mail insisted it had seen a marked improvement from a year earlier, when first quarter figures showed just 76% of first-class and 89.3% of second-class post arrived on time.
The group – whose owner International Distribution Services was bought last year by Czech billionaire Daniel Kretinsky – recently pledged to meet the Ofcom delivery targets by May 2027 as part of a plan to invest £500 million in the service over the next five years. Last July, Ofcom gave postal reforms the green light to reflect steep declines in the number of letters being sent, allowing second-class letters to be delivered on alternate weekdays only.
Rollout and regulatory pressure
Royal Mail expects to complete the rollout of the new model across all its 1,200 delivery offices by Christmas, after initially being delayed until it had reached agreement with trade unions.
Jamie Stephenson, Royal Mail chief operating officer, said: “These results are encouraging and show that the work we are doing to improve the service is having an impact. First-class performance is well ahead of where we expected to be at this stage of our improvement plan, while second-class is tracking in line with the plan.” But he said “we know there is more to do”.
Ofcom launched an investigation in June into Royal Mail’s failure to meet its delivery targets for the second year running in the 12 months to the end of March. It was fined a record £21 million by Ofcom in October last year for missing targets in 2024-25.
Backstop target and financial results
While the regulator lowered Royal Mail’s targets in April, it added a new “enforceable” backstop delivery target, so that 99% of mail has to be delivered no more than two days late. Royal Mail said it also missed this backstop, but closed the gap, with 98.1% of first-class post delivered within three days and 98.4% of second-class within five days.
The group’s full-year figures in June showed Royal Mail’s operating profits more than halved to £96 million after labour costs soared following minimum wage hikes and an extra £133 million employee tax bill. The results showed Royal Mail’s parcel volumes rose 7% to 1.4 billion over the year, but addressed letter volumes fell 10% to 5.7 billion.
Citizens Advice called on Ofcom to cap stamp price rises while Royal Mail continues to miss targets. Tom MacInnes, director of policy at Citizens Advice, said: “Despite Ofcom lowering the company’s delivery targets in April, Royal Mail has already claimed it needs until next Spring before it can actually meet them. This is not good enough and fines for poor service have had little impact. We now want to see Ofcom using stamp price caps to ensure Royal Mail can’t go on increasing prices while missing targets.”
