Royal Mail pay deal raises significant concerns among analysts

[TrueBlueTerrier]

https://www.proactiveinvestors.co.uk/co ... 20502.html

10% pay rise no panacea for macro pressures, warns Liberum

“Things will get worse before they get better” at Royal Mail after its owner, International Distributions Services struck a deal with the Communication Workers Union (CWU) to settle their dispute over pay and working conditions.

Analysts at Liberum retain “significant concerns” about the execution of the deal, which will see posties receive a 10% pay rise alongside some changes in working patterns, with the impact on costs to be realised immediately while working practices will be phased in.

“Even if implementation is wholly successful (which would be at odds with recent history), things get worse before they get better, and the macro backdrop is deteriorating,” said the broker.

One problem that Royal Mail will face is that UK consumers are starting to lose faith in the reliability and convenience of parcel delivery services.

Data compiled by Quadient, an automation company that provides mailing equipment, found that nearly half (47%) of adults surveyed were worried about the way parcels are sent and that services will become more expensive while getting worse.

Quadient found that the main concerns among consumers centre around experiences of missed or stolen deliveries, the need to reduce emissions and unsatisfactory click-and-collect options.

Consumers are open to alternatives, which include combining a journey with picking up a parcel, which could replace the average 47 parcel delivery and pick-ups a day completed by couriers, a total of 1.4bn driven miles a year.

Liberum remained Sell on International Distributions Services, with a target price of 180p.

[britwrit]

Eh. Or maybe the business got a well-below-inflation pay rise across three years. And lower pay for new entrants.

I despise this but seriously, if you're a super-duper capitalist, you should be jumping for joy.

[Mr Rush]

Is this a psychological operation to make us think we got a great deal?

[renrag40]

Yes

[guardianangel]

We work for royal mail and even we dont trust it or have faith,if i was a customer id certainly be worried ,while amazon ramp up their collection point royal mail close theirs down. this company has a backward thinking board and management and while they pay poor wages and lower conditions the more they drive it towards extinction,when will investors realise there is no more money to be made in deliveries they've taken all the money and left the delivery sector in pieces ,just an idea maybe they should have drive through parcel pickups in retail parks it could save millions on vehicles and staff i know your union may object to this but makes good business sense,im available for redundancy at anytime and would leave this week if they wanted me too.