Royal Mail warns it will increase cost of stamps again

It is a fresh blow for millions of consumers who are already facing huge increases in the cost of living, including rocketing energy and fuel bills.

Mr Williams also said a temporary boost during the pandemic, when millions of consumers in lockdown turned to online shopping and fuelled demand for parcel deliveries, was wearing off.

He said: “We have clear headwinds as we enter 2022/23, such as weakening GDP and growing inflationary pressures. 

“We are taking actions to address short term challenges, including price increases and accelerating efficiency opportunities, while still investing for the future.”

A spokesman added that no decisions had been made on price increases yet and the company would “carefully consider the impact on customers”.

Royal Mail has already increased the price of its domestic letter services by 7pc and parcel prices by 4pc, the update said.

In April the company raised the cost of a first class stamp by 10p to 95p. Second class stamps rose in price by 2p to 68p. They cost 41p and 32p respectively in 2010.

The warning came as Royal Mail’s profits shrunk to £662m in the year to March 31, compared to £726m a year earlier. 

That was despite sales rising from £12.6bn to £12.7bn over the same period.

Royal Mail, which operates the UK’s largest fleet of vans, blamed rising energy and fuel costs for the profits squeeze. It was also forced to shell out more on wages because of the tight labour market, which is making it harder for businesses to hire staff.

Official figures showed inflation hit 9pc in the year to April, a level unseen for 40 years.

Meanwhile, bosses are in dispute with postal workers, represented by the Communication Workers’ Union, over pay. Royal Mail said it was negotiating with the CWU on cost saving measures as well as the “substantial pay offer” it had made to staff.

Terry Pullinger, the union’s deputy general secretary, said of the results: “Every single penny of the £758m profit was from letter, parcels and test kits collected, processed, distributed and delivered by key postal workers, not by board members and not by shareholders, but by our members.

“It is an outstanding effort delivered during unprecedented times from key workers that have a massive vocational sense of purpose.

“The CWU are immensely proud of our members and even more determined than ever to get them the reward, recognition and pay rise that these results prove they deserve.”