Royal Mail Will Increase Rates in April

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The price of First- and Second-Class stamps in the United Kingdom is set to increase 2 pence, to 32 pence and 23 pence, respectively, beginning in April, Royal Mail said this week. The increases are subject to Royal Mail accepting price controls suggested by industry regulator Postcomm, which will be decided in March.


First-Class stamps rose 2p last April, while the cost of sending a Second-Class letter increased 1p two years ago. First-Class franked mail and items carrying a printed postage impression will continue to get a 1p discount for items up to 60 grams compared to the price of stamped mail.


The price of some business mail services will decrease for heavier items, Royal Mail said, though business mail will continue to subsidize personal letters and birthday cards. Royal Mail currently loses 5p on every First-Class stamped letter and 8p on every Second-Class-stamped letter.


"Now that the UK mail market is open to full competition, it is essential that our prices are more closely aligned to the true cost of collecting, sorting and delivering 83 million items of mail a day to 27 million addresses across the UK," Lorna Clarkson, director of commercial policy and pricing at Royal Mail, said in a statement.


Royal Mail said its prices would get closer to reflecting the cost of handling mail later when its pricing-in-proportion system is introduced Aug. 21. This system will take size and shape as well as the weight of mail into account, meaning that prices will more closely reflect the cost of collecting, sorting and delivering mail. Eighty percent of stamped mail, and 70 percent of business mail, will be unaffected by the PIP price changes, Royal Mail said.


Royal Mail is in the middle of a $17 million campaign to help businesses prepare for the introduction of PIP. Packages with information about the new pricing system were mailed to 500,000 small, medium and large businesses two weeks ago. The mailing follows a series of December mailings to companies in the marketing, publishing, charity and home shopping sectors.


"These information packs are designed to provide businesses with detailed information on the changes along with a size guide template and pricing brochure [that] gives an indication of how current prices will compare with PIP prices, Clarkson said.


The campaign will incorporate television, radio and newspaper advertising as well as information in all 14,500 post offices. Later in the year, Royal Mail will send a mail piece to every address in the UK, both business and residential, to make sure that all customers are prepared for the pricing change.


Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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