Competitor "dismay" at Royal Mail price drop for direct mail

The price drop is designed to maintain mail’s competitiveness as a communications channel, a spokesperson for Royal Mail said.

A client mailing 500,000 items a year would have their Royal Mail bill reduced by £3,000, according postal consultants Post-Switch.com.

"Royal Mail operates in a competitive marketplace and we’re fully committed to offering our customers the best value for money," the Royal Mail spokesperson said. 

The price decrease comes into effect on 26 October.

TNT and UK Mail were unavailable for comment as this story went to press.

However postal consultants said competitors would be dismayed at Royal Mail’s move as the price they must pay to access Royal Mail's delivery network remains unchanged.

"Royal Mail’s rivals don’t have access to a Mailsort 3 service, which was designed especially for high volume mailers, and this will undermine them," said David Robottom of D&S Consultants.

Post-Switch.com founder Jonathan DeCarteret said his consultancy would support the move "if the wholesale rate that competitors have to pay was being reduced to mirror the retail rate, which is not happening. This is why we view Royal Mail’s price decease as anti-competitive."

The news comes as TNT NV, the parent of TNT Post UK and Europe's second-largest post company, yesterday reported a 60 per cent fall in net profit for the second quarter.

TNT said it saw little evidence of economic recovery as operating profits in mail fell 13 per cent, with express delivery experiencing an 81 per cent decline.

This article was first published on Marketing Direct