Royal Mail to introduce parcel lockers to keep pace with Amazon

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Retail Reporter

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While it is true the Royal Mail deal may face some regulatory resistance, the alternative situation may be worse for the next government.
While it is true the Royal Mail deal may face some regulatory resistance, the alternative situation may be worse for the next government.

Royal Mail has announced plans to use parcel lockers after criticism for slow deliveries and claims of neglected letters.

The introduction of lockers would follow similar moves by rival Amazon, which currently operates around 5,000 lockers across the UK.

Lockers allow companies to lower costs as there’s only one delivery point. They also give consumers more flexibility as they can choose when and where they want to collect their package without having to reschedule deliveries.

The news comes days after the company’s head, Martin Seidenberg, faced a grilling from the commons business and trade committee about Royal Mail’s recent performance.

Royal Mail’s share of the postal market has fallen from 34 per cent in 2020 to 25 per cent in 2022; Amazon, DPD and Hermes have each gained a two per cent market share over the period.

Polish courier InPost, which relies on lockers, reported a nine-fold increase in global revenues to $1.8bn in the four years to 2022.

Royal Mail has struggled this year amid criticism from workers, customers and industry regulator Ofcom.

The Sunday Times alleged in an investigation earlier this year that the postal service was neglecting letters in favour of more profitable parcels, while postal employees went on strike for two and a half weeks earlier this year amid overwork and low pay.

Ofcom fined Royal Mail £5.6mn in November after it failed to deliver over a quarter of first-class mail on time.

A few weeks ago, regulator Ofcom expressed concern that “Royal Mail’s performance has not shown any signs of improvement and . . . it has been unable to provide us with a timeline for when its performance will improve”.

The price of stamps has also shot up, with first-class stamps rising by over 30 per cent since last October.

Chief commercial officer Nick Landon told the FT that the company was focusing on reaching “a position where we are profitable” and “a position where we are growing and winning back market share on the back of great service”.