Royal Mail Delivery Performance Deteriorates as Regulator Launches Fresh Investigation

Royal Mail faces a fresh regulatory investigation after failing to meet delivery targets for the tenth consecutive year, with nearly a quarter of first-class mail arriving late. The company managed to deliver only 75.7% of first-class letters on time against a regulatory target of 93%, according to its latest quality-of-service report covering the year to the end of March.

The postal regulator Ofcom expressed serious concern over the deteriorating figures and confirmed it would investigate Royal Mail's performance. The company's failure to meet targets has worsened compared with the previous year, when 76.9% of first-class mail arrived on time. For second-class post, Royal Mail delivered 90.2% of letters within the three-working-day target, falling significantly short of the required 98.5%.

A central focus of Ofcom's investigation will examine whether Royal Mail is prioritising parcel delivery over letters—a practice that postal workers and unions have alleged but the company has denied. This allegation carries particular significance, as parcels generate higher revenue than traditional mail services. Royal Mail executives, including new owner Daniel Kretinsky, have already faced parliamentary scrutiny over these claims, with Kretinsky publicly apologising for late letters during a parliamentary select committee hearing.

The company has not achieved its delivery target for first-class post since 2017, nor for second-class mail since 2020. The figures reflect performance under Kretinsky's EP Group, which completed its takeover of Royal Mail's parent company, International Distribution Services, following government national security approval. Royal Mail's ongoing struggles come despite a 10p increase to first-class stamp prices in April, bringing the cost to £1.80.

Royal Mail stated that service improvements were underway and that the company aims to meet reduced targets of 90% for first-class and 95% for second-class delivery by the following year. The company announced plans to invest £500 million over five years in reliability improvements. However, the postal service has already incurred £37 million in fines since 2023 for missing targets, including a £21 million penalty issued by Ofcom in October for regulatory breaches.