In a move that has sparked concern across the country, Royal Mail will reduce second-class letter deliveries from July, ending Saturday service and implementing an alternating weekday schedule as the postal service struggles with declining volumes and mounting losses.
The industry regulator Ofcom has approved changes that will see second-class letters delivered on either Monday, Wednesday, and Friday or Tuesday and Thursday, operating on a two-week cycle. The reforms take effect on 28 July following a pilot programme across 37 delivery offices since February.
Regulator Defends ‘Urgent Reform’
Ofcom justified the service reduction as essential for Royal Mail’s survival amid plummeting letter volumes. “These changes are in the best interests of consumers and businesses, as urgent reform of the postal service is necessary to give it the best chance of survival,” said Natalie Black, Ofcom’s group director for networks and communications.
However, Black cautioned that regulatory changes alone would not resolve Royal Mail’s service issues. “The company now has to play its part and implement this effectively,” she said.
First-class mail will continue to be delivered six days a week under the revised Universal Service Obligation, though delivery targets have been relaxed. Royal Mail must now deliver 90% of first-class mail next-day, down from 93%, while second-class mail targets drop from 98.5% to 95% within three days.
Industry Welcomes Changes Despite Implementation Challenges
Royal Mail’s parent company, International Distribution Services (IDS), welcomed the announcement as “good news for customers across the UK” that would support a “reliable, efficient and financially sustainable Universal Service.”
Martin Seidenberg, IDS chief executive, said the changes reflect the “realities of how customers send and receive mail today.” The company estimates implementation will take 12 to 18 months across its network and stated it was “keen to move ahead with deployment as soon as possible.”
Critics Warn of Service Deterioration
Consumer groups and political parties have strongly criticised the changes, questioning whether reduced service will improve reliability. Citizens Advice highlighted Royal Mail’s “woeful track record of failing to meet delivery targets, all the while ramping up postage costs.”
Tom MacInnes, Citizens Advice director of policy, said Ofcom had “missed a major opportunity to bring about meaningful change.” He argued that “pushing ahead with plans to slash services and relax delivery targets in the name of savings won’t automatically make letter deliveries more reliable or improve standards.”
The UK Greeting Card Association expressed concern that “a reduction in the second-class service, would lead to a reliance on uncapped, unregulated first-class mail that is increasingly unaffordable for businesses and consumers alike.”
Political Opposition Mounts
The Liberal Democrats condemned the decision as “deeply worrying” for postal service users. “People need to know that their post will arrive on time so they can go about their lives, and this move flies right in the face of that,” said the party’s business spokesperson, Sarah Olney.
The Department of Business and Trade acknowledged changing postal usage patterns while emphasising service expectations. “The public expects a well-run postal service, with letters arriving on time across the country without it costing the earth,” a spokesperson said, adding that “we now need Royal Mail to work with unions and posties to deliver a service that people expect, and this includes maintaining the principle of one price to send a letter anywhere in the UK.”
Financial Pressures Drive Reform
The changes come as Royal Mail faces severe financial challenges. Letter volumes have collapsed from 20 billion in 2004-05 to 6.6 billion in 2023-24, while revenues from letters fell from £6.9bn to £3.7bn since 2008.
Despite doubling first-class stamp prices from 85p to £1.70 since 2022, Royal Mail recorded a £348m loss in 2023-24. Ofcom has fined the company three times since 2020 for missing delivery targets, totalling £17.6m in penalties.
Market Response and Ownership Changes
Financial markets have responded positively to the regulatory changes. Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the change to less frequent second-class deliveries “will be music to the ears of Royal Mail’s new owner.”
The £3.6bn sale of Royal Mail to Czech billionaire Daniel Kretinsky’s EP Group was cleared by shareholders in April, marking the end of the company’s public ownership.
Ofcom has also launched a review of pricing and affordability, “which will consider concerns that many people and organisations have raised about stamp prices,” signalling potential further changes to the postal service’s operating model.
