Royal Mail has announced it will increase the price of first class stamps by 15p to £1.25 from 2 October 2023. The price hike comes as the company faces mounting cost pressures and a long-term decline in letter volumes.
Second class stamp prices will remain unchanged at 75p. Royal Mail said the new first class price is in line with the European median price of £1.25, as calculated across 29 countries, in January 2023. At 75p, second class stamps are well below the European median of 94p.
Royal Mail claimed it had sought to minimize the increase in the face of declining mail volume, which has fallen from 20 billion items in 2004/5 to just 7 billion this year. Over the same period, the number of addresses rose by 4 million.
“We understand the economic challenges that many of our customers are currently facing and have considered the price changes very carefully in light of the significant decline in letter volumes,” said Nick Landon, Royal Mail’s Chief Commercial Officer.
Royal Mail has long argued that the Universal Service Obligation (USO) – which requires it to deliver letters six days a week to every UK address – is outdated and needs reform. Ofcom research shows 97% of consumers and SMEs would be satisfied with a five day per week service.
The company reported a £419 million loss in its latest financial year as letter volumes plunged. Royal Mail maintains reform of the USO is urgently required to ensure the sustainability of the postal service.
“It is vital that the Universal Service adapts to reflect this new reality,” Landon added.
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