Amazon delivers blow to Royal Mail growth potential

Online retail giant Amazon’s delivery service will more than halve the growth potential for Royal Mail’s parcels business, the former state-owned British company said yesterday, sending its shares lower.

Parcels make up half of Royal Mail’s turnover and the development of online shopping has made them central to its prospects when letter volumes are in decline.

However, competition from the likes of TNT, Yodel, and a new delivery service from Amazon, which was Royal Mail’s biggest customer accounting for 6% of sales, has hampered progress and hit revenues.

Royal Mail yesterday warned that Amazon’s plans to deliver more of its own packages would cut growth in the British parcels market for it and rivals from an annual rate of 4% to 5% to 1% to 2% for at least two years.

The squeeze showed in a 21% decline in Royal Mail operating profit for the six months to September 28, although the figure of £279m (€348m) was not as bad as many analysts had feared.

Moya Greene, Royal Mail’s CEO, told Reuters:

“When an online retailer of the size and scale of Amazon decides to build out its own delivery network, that changes the market for everybody.” She added that Royal Mail was sticking to its full-year forecasts.

Reuters


Lifestyle

Leopard print midi dresses and sequins swirled beneath glossy goddess hair and golden headbands as the great and the good of Cork gathered for ieStyle Live.Leopard print and sequins to the fore at inaugural #IEStyleLive event

You have a long half-term break ahead of you all, and there’s only so much screen time anyone in the family can handle. Everyone is going to need a book-break at some point or another.We reviewed some of the best new books to keep kids entertained over half-term

Sexual politics, snideput-downs and family rivalries are fuelling the trouble brewing in a small Midlands town.Charlie Murphy and Pat Shortt star in new Irish film 'Dark lies the Island'

Robert Hume tells of the eccentric MP for Athboy, Co. Meath – born 300 years ago this month – who thought he was a teapot, and was afraid his spout might break off.A strange brew of a man: The MP for Meath who believed he was a teapot

More From The Irish Examiner