6 - Post

Figure 6.1

UK postal services industry 2008 2009 2010 2011 2012 2013

Addressed mail volumes 20.6bn 18.7bn 17.5bn 16.7bn 15.5bn 14.8bn

Addressed mail revenues £7.0bn £6.8bn £6.7bn £6.9bn £7.3bn £7.5bn

Proportion of access mail in total mail 25% 33% 40% 43% 46% 49%

Letter volumes delivered by operators other than Royal Mail

n/a 11.8m 11.3m 8.5m 18.0m 56.1m

Direct mail share of total advertising spend n/a 17.8% 15.9% 14.9% 14.5% 14.1%

Source: Royal Mail Regulatory Financial Statements, Royal Mail Wholesale, Royal Mail Group Annual Reports, AA/Warc, Nielsen. Revenue figures are nominal. Note: Royal Mail calendar year volume figures are derived from Ofcom calculations based on financial year figures in Royal Mail’s Regulatory Statements and unaudited submissions to Ofcom, and are therefore not directly comparable with Royal Mail’s published accounts. Royal Mail figures relate to the "Reported Business”. Other operators’ end-to-end included in ‘Total mail’ since 2009. Prior data are not comparable. Figures are nominal.

UK postal services industry key metrics

Figure 6.2

3

0

5

10

15

20

2012-13 2013-14

Total items of post sent per month: June 2012 to February 2014 Items sent

Month in which items were sent through the post

Source: Ofcom research, Q2 2013-Q1 2014 QC1. Approximately how many items of post – including letters, cards and parcels – have you personally sent in the past month?

Figure 6.3

4

048

1216

2012-13 letters and cards 2013-14 letters and cards2012-13 parcels 2013-14 parcels

Source: Ofcom research, Q2 2013-Q1 2014 QC1. Approximately how many items of post – including letters, cards and parcels – have you personally sent in the past month? QC2. And how many of these items sent in the past month were parcels rather than letters or cards?

Letters, cards and parcels sent per month: June 2012 to February 2014 Number of letters and cards sent

Month in which items were sent through the post

Figure 6.4

5

88 88 93 88

27 25 24 12

45 44 39 32

0

20

40

60

80

100

Q1 Q2 Q3 Q4

Royal Mail Parcelforce Any company other than Royal Mail

Source: Ofcom research, 2013 Q:Which, if any, of these companies have you used to send a packet, parcel or letter? Please think about your personal use rather than any use as part of a business. Base: all respondents

Companies used by residential consumers to send post Proportion of consumers (%)

Figure 6.5

6

13 13

11

13

11

6

9

6

9

7 6 6

8

6 5

6 7 7

5 4

8

6 6

4

6 7

5

3

0

5

10

15

Q1 Q2 Q3 Q4

DHL FedEx City Link Hermes TNT UPS Yodel

Source: Ofcom research, 2013 Q:Which, if any, of these companies have you used to send a packet, parcel or letter? Please think about your personal use rather than any use as part of a business. Base: all respondents

Companies other than Royal Mail used by residential consumers to send post Proportion of consumers (%)

Figure 6.6

7

0

4

8

12

16

2012-13 2013-14

Source: Ofcom research, Q2 2013-Q1 2014 QD1. Approximately how many items of post – including letters, cards and parcels – have you personally received in the past week? QD2. And how many of these items received in the past week were parcels?

Letters and cards received per week: July 2012 to March 2014 Number of letters and cards received in past week

Month of interviewing

Figure 6.7

8

6,953 6,837 6,653 6,899 7,303 7,514

6,841 6,697 6,505

6,744 7,141 7,339

6,120 5,772 5,425 5,475 5,696 5,844

721 924 1,080 1,270 1,445 1,495

112 140 142 150 157 163 0

2,000

4,000

6,000

8,000

2008 2009 2010 2011 2012 2013

Total market

Royal Mailtotal

Royal Mailend-to-end

Royal Mailaccess

Accessoperators

Source: Royal Mail Regulatory Financial Statements, Royal Mail Wholesale, operator returns to Ofcom, Ofcom estimates. Royal Mail calendar year volume figures are derived from Ofcom calculations based on financial year figures in Royal Mail’s Regulatory Statements and unaudited submissions to Ofcom, and are therefore not directly comparable with Royal Mail’s published accounts. Royal Mail figures relate to the "Reported Business”. Royal Mail end-to-end refers to Royal Mail total mail volumes excepting access. Other operators’ end-to-end included in ‘Total mail’ since 2009. Prior data are not comparable. Figures are nominal.

Mail revenue: 2008-2013 Revenue (£m)

Figure 6.8

9

20,577 18,651

17,546 16,676 15,545 14,764 15,574

12,534 10,629

9,502 8,299 7,523 5,003

6,105 6,906 7,166 7,228 7,185

12 11 9 18 56 0

6,000

12,000

18,000

24,000

2008 2009 2010 2011 2012 2013

Total mail

Royal Mail end-to-end

Royal Mailaccess

Other operatorsend-to-endletters

Source: Royal Mail Regulatory Financial Statements, Royal Mail Wholesale, operator returns to Ofcom, Ofcom estimates. Royal Mail calendar year volume figures are derived from Ofcom calculations based on financial year figures in Royal Mail’s Regulatory Statements and unaudited submissions to Ofcom, and are therefore not directly comparable with Royal Mail’s published accounts. Royal Mail figures relate to the "Reported Business”. Royal Mail end-to-end refers to Royal Mail total mail volumes, excepting access. Other operators’ end-to-end letters included in ‘Total mail’ since 2009. Prior data are not comparable.

Mail volumes: 2008 to 2013 Volume (million items)

25% 33%

40% 43% 46% 49%

0%

10%

20%

30%

40%

50%

2008 2009 2010 2011 2012 2013

10

Figure 6.9

Proportion of access in total mail: 2008-2013

Proportion of access in total mail volume

Source: Royal Mail Wholesale, Royal Mail Regulatory Financial Statements, Operators’ returns, Ofcom estimates

Year on year growth rate of access volumes

39.1% 20.3% 14.8% 2.2% 0.8% -0.6%

Figure 6.10

11

11.8 11.3 8.5 18.0

56.1

0

10

20

30

40

50

60

2009 2010 2011 2012 2013

Source: Ofcom analysis of operators’ returns

Other operators’ end-to-end letter volumes: 2009-2013 Volume (million items)

Figure 6.11

12

51 52 51 50 50 49

29 28 29 29 29 28

8 8 9 10 11 12 6 6 6 6 5 5 5 6 6 6 5 5

0%

20%

40%

60%

80%

100%

2008 2009 2010 2011 2012 2013(estimate)

Social mailPublishingParcelsDirect mailTransactional

Source: PricewaterhouseCoopers, The Outlook for UK Mail Volumes to 2023, July 2013 Note: 2013 is PwC estimate.

Mail volumes by type: 2008 – 2013 Proportion of type of mail in total volume (%)

Figure 6.12

13

1,798 1,720 1,648 1,570 1,490

17.8% 15.9% 14.9% 14.5% 14.1%

0%

6%

12%

18%

0

500

1000

1500

2000

2009 2010 2011 2012 2013

Spend on direct mail Direct mail share of advertising spend

Source: AA/Warc Advertising Expenditure report / Nielsen. Figures are nominal.

UK direct mail advertising spend and share of total advertising: 2009 - 2013 Spend (£m) Share of total advertising spend (%)

Figure 6.13

14

Source: AA/Warc Expenditure report / Nielsen

Share of direct mail expenditure, by sector: 2009-2013 Share of spend (%)

31.6% 31.8% 31.3% 29.3% 28.7%

20.5% 21.2% 20.2% 19.2% 20.1%

16.2% 16.8% 18.4% 17.4% 17.6%

0%

10%

20%

30%

40%

2009 2010 2011 2012 2013

RetailFinancialGovernmentServicesIndustrialDurablesConsumables

Figure 6.14

15

43.8 49.8

58.8 68.0

78.2 91.0

0

30

60

90

2008 2009 2010 2011 2012 2013

Source: Interactive Media in Retail Group, January 2014

Value of UK e-commerce sales, 2008-2013 Value (£ billion)

Figure 6.15

16

3% 3%

40% 30%

57% 67%

0%

20%

40%

60%

80%

100%

2012 2013

Economy

Specified day (including nextday)Specified time

Source: Ofcom analysis of IMRG / Metapack Delivery Index, January 2012-December 2013. Note: Specified time includes: AM, PM, before 10am, evening and school run. Specified day includes same day and next day. Proportions rebased to exclude international.

Service types used for the fulfilment of e-retail: 2012 and 2013 Proportion of parcels (%)

Figure 6.16

17

6,112 6,046 6,148 6,229 6,110 5,462

14.7% 14.9% 14.7% 15.1% 15.4% 14.9%

0

5

10

15

0

2,500

5,000

7,500

2008 2009 2010 2011 2012 2013

Subscription circulation Share of total circulation

Source: Mediatel/ABC, 6-monthly net average circulation and subscription sales

Magazine subscription circulation: 2008-2012 Average subscription circulation (thousands) Share of total circulation (%)

Figure 6.17

18

48 52 61

66 75

90 90 93

40 42 47 51

58 69 69 73

34 36 39 41

46

60 60 62

24 27 30 32 36

50 50 53

0

20

40

60

80

100

2007 2008 2009 2010 2011 2012 2013 2014

First ClassLarge Letter

Second ClassLarge Letter

First Class

Second Class

Source: Royal Mail. Figures are nominal. Prices refer to Royal Mail First and Second Class Standard and Large Letter list prices for letters up to 100g,

First and Second Class stamp prices Price (p)

Figure 6.18

19

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All respondents (n = 4823 adults 16+, 1294 16-34, 1617 35-54, 1912 55+) QC1. Approximately how many items of post – including letters, cards and parcels – have you personally sent in the last month?

Number of items sent per month

Items of post sent per month (% of respondents)

20 29 17 16

21 25

19 17

19

19

19 18

26 20

27 30

8 4 9 11

6 3 7 7 1

0%

20%

40%

60%

80%

100%

Adults 16+ 16-34 35-54 55+

Don't know21+ items11-20 items5-10 items3 or 4 items1 or 2 itemsNone

6.7

Mean number of items sent per month

4.3 7.4 8.4

Figure 6.19

20

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All respondents (n = 4823 adults 16+, 1294 16-34, 1617 35-54, 1912 55+) QC2. And how many of these items sent in the last month were parcels rather than letters or cards?

Number of parcels sent per month

Parcels sent per month (% of respondents)

70 71 65 73

19 19 20

17 6 6 8 5 4 3 5 4 1 1 1 1 1 1

0%

20%

40%

60%

80%

100%

Adults 16+ 16-34 35-54 55+

Don't know

21+ parcels

11-20 parcels

5-10 parcels

3 or 4 parcels

1 or 2 parcels

None

0.9

Mean number of parcels sent per month

0.8 1.0 0.9

Figure 6.20

21

33

56

79

43

63

70

42

54

63

39

58

71

0 10 20 30 40 50 60 70 80 90

Parcels

Formal mail

Personal mail

16+16-3435-5455+

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All who have personally sent any items of post in the last month (n = 3817 adults 16+, 899 16-34, 1357 35-54, 1561 55+) QC5. Which of these types of mail would you say you have personally sent in the last month by post? (MULTICODE)

Types of mail sent in the past month Proportion of consumers (%)

Figure 6.21

22

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All who have personally sent any items of post in the last month (n = 3817 adults 16+, 899 16-34, 1357 35-54, 1561 55+) QC5. Which of these types of mail would you say you have personally sent in the last month by post? (MULTICODE)

Types of mail sent in the past month Proportion of consumers (%)

42 30 34

54

37

22

40

25 31

45 40

22

46 34 31

55

41

24

38 31

39

62

32

19

0

20

40

60

80

Formal letters Payments forbills

Personal letters Invitations/greetings cards/

postcards

Larger parcels Smaller parcels

Adults 16+ 16-34 35-54 55+

Figure 6.22

23

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All respondents (n = 4823 adults 16+, 1294 16-34, 1617 35-54, 1912 55+) QC10. Compared with two years ago, would you say that the number of items you send through the post has... increased greatly, increased slightly, stayed the same, decreased slightly, decreased greatly?

Percentage of respondents reporting an increasing or decreasing amount of post sent in the past two years

15

22

12 12

21

14

23 25

05

1015202530

Adults 16+ 16-34 35-54 55+

Increase Decrease

Proportion of consumers (%)

6pp -8pp -11pp -13pp Net increase:

Figure 6.23

24

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All who say that the number of items sent by post has decreased, compared to two years ago (n = 1030 adults 16+, 180 16-34, 368 35-54, 482 55+) QC13. As your use of post has decreased compared with two years ago, which, if any, of these other forms of communication are you using more instead of post? (MULTICODE)

Methods of communication being used instead of post Proportion of consumers (%)

65

27 26 19 16

9 6 14

80

38 36

12

32

10 12 7

76

29 29 16 19

8 7 9

47

20 17 25

4 9 3

22

0

20

40

60

80

100

Email Textmessaging/

SMS

Mobilephone calls

Landlinephone calls

Socialnetworkingsites/ apps

In-person/face-to-face

InstantMessaging

None inparticular

Adults 16+ 16-34 35-54 55+

Figure 6.24

25

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All respondents (n = 4823 adults 16+, 1294 16-34, 1617 35-54, 1912 55+) QD1. Approximately how many items of post – including letters, cards and parcels – have you personally received in the last week?

Number of items received per week

20 29 17 16

21 25

19 17

19 19

19 18

26 20

27 30

8 4 9 11

6 3 7 7

0%

20%

40%

60%

80%

100%

Adults 16+ 16-34 35-54 55+

Don't know21+ items11-20 items5-10 items3 or 4 items1 or 2 itemsNone

Items of post received per week (% of respondents) 8.7

Mean number of items received per week

7.3 9.7 9.1

Figure 6.25

26

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All respondents (n = 4823 adults 16+, 1294 16-34, 1617 35-54, 1912 55+) QD2. And how many of these items received in the last week were parcels rather than letters or cards?

Number of parcels received per week

Number of parcels received per week (% of respondents)

67 64 64 74

22 25 22 19

6 6 9 5 3 3 4 2

0%

20%

40%

60%

80%

100%

Adults 16+ 16-34 35-54 55+

Don't know

21+ parcels

11-20 parcels

5-10 parcels

3 or 4 parcels

1 or 2 parcels

None

0.8

Mean number of parcels received per week

0.9 0.9 0.5

Figure 6.26

27

Source: Ofcom Residential Postal Tracker, Q4 2013-Q1 2014 Base: All who have received a parcel in the last week (n = 796 adults 16+) QD17. Thinking of the parcels that you have received in the last week, which of these companies delivered the parcels? (MULTICODE) Chart shows companies mentioned by more than 1% of those receiving any parcels in the past week

Proportion of consumers reporting delivery of parcels, by company Company parcels delivered by (% of all who have received a parcel in the past week)

50%

21%

19%

10%

Only RoyalMail

Royal Mailand anyother/sOnly other/s

Don't know

71

9 8 7 6 6 4 4 4 0 %

20 %

40 %

60 %

80 %

Figure 6.27

28

45

67

82

39 44 39

56

76

42 38 45

72

87

44 48 51

72 82

31

46

0

20

40

60

80

100

Personal mail Direct mail Transactionalmail

Parcels Publications

16+16-3435-5455+

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All respondents (n = 4823 adults 16+, 1294 16-34, 1617 35-54, 1912 55+) QD4. Please think about items that are addressed to you personally rather than leaflets or charity collection envelopes or bags that may come through your letterbox. Which of these types of items would you say you have personally received through the post in the last month? (MULTICODE)

Categories of mail received in the past week Proportion of consumers receiving each type of mail (%)

Figure 6.28

29

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All respondents (n = 4823 adults 16+, 1294 16-34, 1617 35-54, 1912 55+) QD4. Please think about items that are addressed to you personally rather than leaflets or charity collection envelopes or bags that may come through your letterbox. Which of these types of items would you say you have personally received through the post in the last month? (MULTICODE)

Types of mail received in the past week Proportion of respondents who have received each type of mail (%)

17 24 24

32 32

38 46 48

53 82

0 20 40 60 80 100

Subscription magazinesPersonal lettersSmaller parcels

Invitations/ greetings cardsLarger parcels

Catalogues/ brochuresAddressed direct mail

Letters from organisations you knowStandard circulars

Bills/ invoices/ statements

Figure 6.29

30

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All respondents (n = 4823 adults 16+, 1294 16-34, 1617 35-54, 1912 55+) QF1. As far as you know, how much does it currently cost to send a standard letter by first class using a stamp? (SINGLE CODE)

Awareness of the price of a First Class stamp Proportion of respondents (%)

18 19 20 16

35 28 38 39

13 15

10 14

34 39 31 32

0%

20%

40%

60%

80%

100%

Adults 16+ 16-34 35-54 55+

Don't know

Incorrect price- over 60p

Correct price -60p

Incorrect price- under 60p

Figure 6.30

31

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All respondents (n = 4823 adults 16+, 1294 16-34, 1617 35-54, 1912 55+) QF1. As far as you know, how much does it currently cost to send a standard letter by second class using a stamp? (SINGLE CODE)

Awareness of the price of a Second Class stamp Proportion of respondents (%)

24 24 24 23

22 15 22 29 5

5 4

6

49 56 49 42

0%

20%

40%

60%

80%

100%

Adults 16+ 16-34 35-54 55+

Don't know

Incorrect price- over 50p

Correct price -50p

Incorrect price- under 50p

Figure 6.31

32

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All respondents (n = 4823 adults 16+) QF3/4. It currently costs 60p/50p to send a standard letter First/ Second Class within the UK. How would you rate the Royal Mail's First/ Second Class service in terms of value for money? (SINGLE CODE)

Perception of value for money of First and Second Class stamps

Proportion of respondents (%)

18 14

36 32

17 17

19 22

10 12

0%

20%

40%

60%

80%

100%

First Class Stamp Second Class Stamp

Don't know

Very poor

Fairly poor

Neither goodnor poorFairly good

Very good

54%

Total who agree First or Second Class stamps are good value for money

46%

Figure 6.32

33

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All respondents (n = 4823 adults 16+, 1294 16-34, 1617 35-54, 1912 55+) QH2A-H. Agreement with statements about sending/ receiving post

Attitudes to post: proportion of consumers agreeing with each statement Adults

16+ 16-34 35-54 55+

I love to send and receive letters and cards 60 53 59 69

I prefer to send letters or emails to companies rather than make a phone call, so that I have a written record

61 63 65 56

I prefer to send emails rather than letters whenever possible 55 71 61 33

I only use post if there is no alternative 40 49 41 31

I send fewer letters by post now due to the cost 27 24 28 29

I would feel cut off from society if I can't send or don't receive post 53 45 51 64

I only send my mail First Class if it needs to get there the next day 48 44 44 56

I trust Second Class post to get there in a reasonable timeframe 62 61 58 69

Figure 6.33

34

Source: Ofcom Residential Postal Tracker, Q2 2013-Q1 2014 Base: All respondents (n = 4823 adults 16+, 1294 16-34, 1617 35-54, 1912 55+) QE1. How reliant would you say you are on post as a way of communicating? (SINGLE CODE)

Reliance on post as a way of communicating Proportion of respondents (%)

25 19 23 32

41 43 42

38

11 11 13 9

17 19 16 16 6 7 6 5

0%

20%

40%

60%

80%

100%

Adults 16+ 16-34 35-54 55+

Don't know

Not at all reliant

Not very reliant

Neither

Fairly reliant

Very reliant