Royal Mail to trial Sunday parcel delivery amid increased demand By Investing.com

By Samuel Indyk

Investing.com – Royal Mail PLC (LON:RMG), the UK-based courier company, announced on Friday that it will begin a Sunday parcel delivery trial amid a surge in demand.

The FTSE 250 listed company earlier this week lifted its profit forecast, citing stronger than expected advertising, business, and stamped mail volumes at the beginning of this year.

Sunday plans

Under the new plans, Royal Mail plans to deliver packages from large-sized retailers seven days a week.

The company said “a number of retail brands are trialling the service” but the names of the companies have not been disclosed.

Pandemic

The coronavirus pandemic has caused a surge in e-commerce retail as shops remain shuttered due to various national and local lockdown measures over the last year.

In the latest quarter, Royal Mail delivered a total of 496mln parcels as shops were shut in the run up to Christmas.

“The last year has reset so many customer expectations and the desire for even more convenient and even more frequent parcel deliveries has certainly been one of them,” said Royal Mail’s Chief Commercial Officer Nick Landon. “We always listen to our customers, both senders and recipients, and the ask here was clear: we love what you do Monday to Saturday, so please do the same on a Sunday.”

“Launching a Sunday delivery service is clearly an attempt to seize the moment and capitalise on the snowballing momentum the group has picked up over the past four months,” said Hargreaves Lansdown analyst Susannah Streeter.

However, Streeter is not convinced that the plan will be totally successful, noting that there has long been under investment in automation at Royal Mail.

“Royal Mail needs to show it has the capacity to meet this unprecedented demand,” Streeter added.

Separately, the company said they would be building a new parcel hub in Daventry which will have the capacity to process over 1mln parcels per day, the largest Royal Mail parcel hub in the UK.