// Royal Mail has posted a slump in sales and warned that disputes with workers are holding up turnaround plans
// Royal Mail revenues fell by 11.5% to £1.88 billion over the quarter, compared with the same period last year
The boss of Royal Mail has said disputes with unions over job cuts and pay have stalled transformation plans but stressed the company is still open to talks with unions.
Royal Mail Group chiefs said the postal service was haemorrhaging £1m a day today as revenues across the business fell 5.1%, warning shareholders that weaker parcel demand and “stalled” cost savings will weigh on its outlook for the year.
Royal Mail revenues fell by 11.5% to £1.88 billion over the quarter, compared with the same period last year, which bosses said reflected a slowdown in retail trends and the delivery of covid test kits that buoyed performance through the pandemic, as well a longer term structural decline in letters.
Chairman Keith Williams blamed the slump on a decline in parcel volumes and a lack of progress in “delivering efficiencies”, and said “the pandemic boom in parcel volumes bolstered by the delivery of (COVID-19) test kits and parcels is over.
“Royal Mail is currently losing £1m per day and the efficiency improvements which are needed for long-term success have stalled.”
It comes a day after over 115,000 postal workers at Royal Mail voted to strike over pay in what is expected to be the biggest industrial action of the summer.
Royal Mail chief executive Simon Thompson said: “I am ready to talk about pay and change at any time. But it has to be both.
“When we previously spoke to the unions we said there needed to be an improvement in productivity, but it has not gone forwards but backwards.
“Without change this will continue, and obviously we do have concerns over the impact from yesterday’s CWU announcement.”
Ahead of its AGM today, chiefs warned £100m of benefits that had been identified in its long term transformation plan for the postal division were now in jeopardy due to the dispute with the unions.
However, the business said other cost savings are “on track”, such as through infrastructure changes, although it also saw headwinds from Covid-19 absences.
Royal Mail also confirmed that it posted an adjusted operated loss of £92 million for the three months to the end of June after lower volumes.
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