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Royal Mail strike could cost retailers £270 million, says Kelkoo

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In total, a nationwide Royal Mail strike could cost the UK £1.5 billion, according to new research carried out by the Centre for Economics and Business Research (CEBR) on behalf of Kelkoo.

The report, entitled ‘How the Royal Mail stole Christmas’, identifies the retail industry as the sector that would be heaviest hit and concludes that the cost to retailers could run to £270 million.

Online retailers would be the worst hit and take the brunt of the impact, says the report, with the cost for online businesses expected to be £220 million compared to £50 million for high street retailers.

“The strike could have costly ramifications for both consumers and businesses,” says Kelkoo. “It would force online retailers to use more expensive delivery services in order to uphold their service standards and to help people get their shopping on time, resulting in price increases for consumers.”

“For example, delivery prices for some of Kelkoo’s top retailers would go up from £1.90 per package with Royal Mail to around £4.80 with Parcel Force — a 153% increase,” the company adds. “It is the smaller businesses who are likely to be worst hit since 98% of their post goes through the Royal Mail. Additionally, companies which rely on payments by cheque will feel the full force of this strike, since £75 billion of cheques are sent in the post annually and a delay of a week could prove fatal to hard hit companies.”

Importantly for retailers, according to Kelkoo’s research, 94% of shoppers said they would be unlikely to place further orders with a retailer that failed to deliver.

“The timing of the strike beggars belief,” says Bruce Fair, managing director of Kelkoo UK. “In one fell swoop it threatens to bring the postal network to a standstill, spoil the beginnings of the retail sector’s financial recovery, increase prices for cash strapped consumers and cause a further backlog which already stands at some 30 million items. To add insult to injury, it is speculated that consumers will also be hit with a 3p stamp increase to fill the hole in Royal Mail finances.”

A copy of the full report is available from Kelkoo on request.

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