Royal Mail’s CEO has suggested that the newly-privatised company may need to increase the price of a stamp in order to remain competitive, sky.com reports.
Moya Greene told Sky News that Royal Mail’s services and products were ‘cheaply priced’ when compared against those offered by rival companies in Europe. However, there was a need to price accordingly for the service that was delivered.
Ms Greene added that stamp prices had not been increased in 2013 and that research showed that the majority of households actually only spent 50p per week on stamps. Appreciating the need to retain customer loyalty while pricing competitively, Ms Greene also asserted that Royal Mail’s charges were on the ‘low to medium spectrum’ across various weight categories, telegraph.co.uk writes.
Although a Royal Mail spokesperson denied the insinuation, Royal Mail is free to raise the price of first class stamps up until 2019. That said, the government line, as printed in the shares prospectus last month, reads somewhat more cautiously.
“”Despite the significant increases in prices that were implemented in April 2012, the UK letter market remains competitively priced when compared with European countries.
“Following such significant increases (including above RPI [retail price inflation] price increases in [the full year ending 2012], the directors expect any price increases to be broadly in line with the RPI over the three financial years ending in FYE 2016.”
When asked directly whether a price rise was inevitable, Ms Greene said: “Well, we didn’t raise stamp prices last year.”