Royal Mail hit by drop in festive post

Royal Mail said it is seeing the impact of business uncertainty in the UK on letter volumes

The group said the number of addressed letters fell 6 per cent in the nine months to December 25, while letter revenues fell 5 per cent.

This comes after a 4 per cent fall in letter numbers in its first half.

Royal Mail said: "We are seeing the impact of overall business uncertainty in the UK on letter volumes, in particular advertising and business letters."

The group signalled an impact from Brexit fears on its letters arm in half-year results in November, when revenues from advertising mail slumped 8 per cent.

It said the trend for marketing mail revenues had remained "broadly similar" in the third quarter.

This offset a stronger performance from its parcels business, which notched up a 3 per cent rise in revenues over the nine months to Christmas Day, with the number of parcels delivered up 2 per cent.

Overall revenues across its UK parcels and letters division fell 2 per cent.

But its European parcels business, General Logistics Systems (GLS), saw a strong festive quarter with revenues jumping 9 per cent over the nine months, helping overall group-wide revenues hold firm on a year earlier.

Moya Greene, chief executive of Royal Mail, said: "Our postmen and women delivered a great service at Christmas, even better than last year, with 138 million parcels handled in December alone.

"Our comprehensive planning, which started much earlier this year, enabled us to deliver this service for our customers right across the UK."

While letter mailings have been in decline for some time, Royal Mail said the third quarter was hit particularly hard as it also came up against an "unusually strong" Christmas a year earlier.

It added: "Letters performance in the prior period benefited from the one-off return of direct delivery volumes and a good performance over the peak period."

Royal Mail's Parcelforce Worldwide business suffered a tough Christmas, with parcel numbers down by 1 per cent amid an "increasingly competitive express parcels market".

But the group saw good growth in Royal Mail account parcels.

It said there was no decision yet over controversial changes to its pension scheme announced earlier this month, which sparked union threats of potential strike action.