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Royal Mail parcel volumes drop back as lockdown-driven online boom eases

We are starting to see evidence that the domestic parcel market is re-basing to a higher level than pre-pandemic"

Royal Mail PLC -
Parcels might be stabilising at a higher level

Royal Mail PLC (LON:RMG) said parcel deliveries slowed sharply in its latest quarter as the online boom sparked by the Coronavirus (COVID-19) pandemic eased, though letter volumes continued to rise.

Group revenue in the three months to end June, 2021, grew 12.5% compared to a year ago and by 20.2% over the same period in 2019.

Royal Mail’s revenues rose by 12.2% year-on-year as letters rebounded 26% with businesses resuming marketing. Income from parcels rose even though volumes fell by 13% due to a better product mix, said the FTSE100 group.

Overseas arm GLS saw revenues rise 12.4% in the first quarter of this year with volume growth of 10%, or 34% compared to the first quarter of 2019-20.

Revenue growth at GLS is expected to slow as the year progresses, due to the easing of lockdown restrictions and stronger prior year comparators in the second half.

Keith Williams, chair, said: "For Royal Mail, as expected, parcel volumes decreased and letter volumes increased compared to the exceptional period last year encompassing the UK's first lockdown, when non-essential retailers closed for the first time.

We are starting to see evidence that the domestic parcel market is re-basing to a higher level than pre-pandemic, as consumers continue to shop online.

"For GLS, as expected, parcel volume growth continued albeit at a slower rate, due to the exceptionally strong comparators from the same period in 2020-21.”

Royal Mail Group's statement said forecasts for the year remain unchanged.

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