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Royal Mail may now have a fancy new structure at the top, with the creation of International Distributions Service (IDS), but its difficulties remain the same.
It has a large, radicalised union workforce deeply resistant to changing working practices.
In contrast to the railways, which do have a future irrespective of union battles, the Communications Workers Union (CWU) is walking a tightrope.
Strike action: Royal Mail has a large, radicalised union workforce deeply resistant to changing working practices
The CWU wage demands and objections to modernisation come against a background of declining use for ‘snail mail’.
Each successive strike causes another bit of the market to be eroded. Software such as Docusign and Dropbox mean that professional services such as lawyers and accountants are no longer dependent on the post.
HMRC now communicates with us online and allows us to settle our bills in the same way. Receiving a greetings or post card is still valued but that too is migrating to digital brands such as Jacquie Lawson.
It would be a brave board of directors that put a postal service, with a heritage dating back to 1516, into administration.
Questions would be raised about the future of Parcelforce, the part of the group with a promising future. A major political headache could be the future of the pension fund, which has a crown guarantee.
The dramatic step of insolvency for privatised companies is not unknown.
The then Labour Transport Secretary Stephen Byers forced Railtrack into administration in 2001, leading to a long-running dispute with City institutions. It is hard to think of a Tory government allowing the same to happen.
The impact on the King’s head on our postage stamps doesn’t bear thinking about. And who is going to deliver formal invitations to the Coronation?
Administration would create a new series of problems. The future of IDS and the Royal Mail, in an age of internet shopping, has always been its European logistics offshoot GLS and Parcelforce.
Rishi Sunak and the Government need to step in and bang heads if one of Britain’s most trusted and valuable services is not to fade into obscurity.
Beauty parade
The heavy focus of Walgreens Boots Alliance on the US healthcare markets makes the eventual sale of Boots a certainty.
If second quarter numbers from Boots provide a guide, a sale should attract considerable investor interest.
Ideally, there would be an initial public offering or sales process later this year. But with equity markets jittery because of banking uncertainty and tightening credit, Walgreens may now be looking at 2024.
If Walgreens’ high-profile chief executive Roz Brewer could raise some cash, it would be quite useful. In spite of a vibrant underlying enterprise, Walgreens made a first half loss of £5billion largely driven by a charge related to opioid claims.
The direction of the enterprise is unmistakable with the acquisition of Summit Health making Walgreens one of the largest players in American primary care.
Boots and its chief executive, Seb James, place the best face on future prospects. The latest data shows a 16 per cent sales increase in the three months to the end of February with beauty products booming both in store and online.
The group’s own innovative skin care brand No7 continues to be a great asset. Future investors, trying to work out margins and profit at Boots, may have a harder time piecing matters together.
When Boots does eventually come to market there is much work to do. The relationship with the NHS is tricky and needs clarifying.
And there are real questions as to whether a store portfolio of 2,200 outlets, many in the wrong places, needs major surgery and renewal. Plenty for the next proprietors to get their teeth into.
Whisky chaser
Farewell then to Ivan Menezes, who after ten years at the helm of Johnnie Walker-to-Guinness beverage giant Diageo is downing his glass.
He leaves behind a terrific legacy of strong shareholder returns, growth in the United States and a willingness to invest in new categories such as Casamigos.
The troubled merger of Guinness and Grand Metropolitan in 1997 is ancient history.
It is to Menezes’s credit that he leaves behind an executive team filled with talented women.
His American successor Debra Crew, who has a background at Kraft, Nestle and Mars, should hopefully bring her own pizzazz to the job.
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