First class rises but business prices cut by Royal Mail

by Daniel Farey-Jones,, Brand Republic 13-Dec-04, 07:00

LONDON – Royal Mail has confirmed that the price of a first-class stamp will go up from 28p to 30p on April 7 2005, but there are concessions and even price decreases for business-mail users.

The price of a second-class stamp will remain at 21p, and Royal Mail said that overall the price of postage for 40% of its 83m items handled daily will not change.

Franked and Printed Postage Impression mail will get a 1p discount up to 60g, and discounts ranging from 3p to 8p for heavier items, subject to Postcomm's ongoing consultation process.

Prices will fall by up to 3.1% in some of the Mailsort service options, while others will remain constant and two will rise by no more than 2.7%.

Royal Mail chief executive Adam Crozier said: "Royal Mail last year lost around 5p for every first-class stamped letter posted and around 9p for every second-class stamped letter posted. Business customers cover these costs. As more competitors chase those big customers, we need to reduce that subsidy if we are to compete on a fair and equal basis.

"Customers should pay prices that are related to the cost of the postal services we are providing. Many business customers will see a decrease in postage prices or will be able to post at the discounted rate."

The changes are in line with the formula agreed by Postcomm, setting a three-year, below-inflation control for changes to Royal Mail's prices that is valid until March 31 2006.

Royal Mail also announced that it is to return more money to bulk business customers for the disruption to services caused by last autumn's unofficial strike action.

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