The ghost of a future Christmas on social media and the slow death of the festive greetings card are hanging heavily over Royal Mail.
The postal network reported a 2 per cent slump in UK revenues for the nine months to Christmas Day on the back of a 6 per cent dive in the amount of letters and cards people send. The uncertainty of Brexit was not helping either.
With potentially disruptive pay and pensions negotiations also stalking the company, Royal Mail shares were down 5.99 per cent at 422½p.
That puts the stock close to a two-year low. Those depths, plumbed in late 2014 when they slipped below £4 a share, were the lowest the stock had traded at since the flotation in the autumn of 2013 at 330p before rocketing away on its market debut.
In a quarterly trading update, Royal Mail reported its addressed mail volumes fell by 6 per cent. That is at the worst end of year-on-year declines in the letter market that Royal Mail has forecast. It is not just Christmas cards which are suffering as people increasingly communicate by text, email or social media channels.
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“We are seeing the impact of overall business uncertainty in the UK on letter volumes, in particular advertising and business letters,” it said.
That dragged down the rest of Royal Mail’s UK performance and the focus of the company on the parcels market. The rise of internet shopping and e-commerce means that the delivery market is growing at an estimated 15 per cent to 20 per cent every year. Royal Mail’s share of that growth remains sluggish, rising 2 per cent year on year.
Company officials have argued that Royal Mail disbars itself from much of the home delivery market on profitability grounds or the type or size of parcel. It has also been outmanoeuvred by Amazon which delivers more and more of its own goods through its expanding logistics network .
Parcelforce volumes were off 1 per cent as it remains battered in the export market in delivering parcels by the big international players such as Federal Express and UPS.
Moya Greene, the chief executive who has just launched an attempt to downgrade much of her workforce’s pensions arrangements, applauded the work they had done in recent weeks.
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“Our postmen and women delivered a great service at Christmas with 138 million parcels handled in December alone,” she said.