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.