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Section 1 describes the key bodies in the UK postal market and the relationships between them. This section also introduces key terminology used to describe the UK postal market.

Royal Mail is the largest operator and the ‘universal service provider’ in the UK postal industry. Ofcom is the regulator of UK postal services and focuses much of its regulatory activity on Royal Mail as the universal service provider.

This section also tackles frequently asked questions regarding postal services, with a particular focus on issues that constituents may face.

Section 2 lays out the regulatory framework of UK postal services.

Section 3 sets out trends in the UK letters market. UK letter volumes have been in decline since the mid-2000s.

Section 4 describes recent trends in stamp prices. Ofcom granted Royal Mail price flexibility over stamp prices in 2012. Soon after, the price of 1st class stamp rose substantially.  A 1st class stamp is now priced at 95p, 144% higher than the face value of a stamp in 2010.

Section 5 sets out trends in the UK parcels market. Since March 2020, parcel deliveries have significantly increased due to an increase in online shopping prompted by the Covid-19 pandemic. Royal Mail reported a year-on-year increase of 34% in parcel volumes in the five months to 30 August 2020.

Section 6 explains the recent performance of Royal Mail. Royal Mail’s profits after tax have risen by £325 million over the last year and were £521 million in 2020/21. 

Royal Mail missed some of its quality of service targets in each of the past few years, some by quite a margin.  It commented that its performance had been “significantly impacted by a number of exceptional events”. 

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