Royal Mail set to boost door drop business after CWU deal

The Royal Mail could double its share of the door drop market following the agreement to lift the limit on the amount of unaddressed mail it can deliver.

As part of the deal brokered with the Communication Workers Union that ends a long-running dispute, the three items per household limit that the Royal Mail was restricted to has been abolished.

A Royal Mail spokesman says the deal will enable it to “compete more effectively with competitors to increase our market share”.

Postal broker PostSwitch.com, which values the door drop market at over £500m, says that the deal could help the Royal Mail lift its share of market from 25% to 50%.

Chris Phillips, market analyst at PostSwitch, says the Royal Mail’s growth opportunity lies in targeting areas unavailable to rivals such as TNT Post.

Mark Davies, managing director of TNT Post’s door drop media business, says:”The deal widens the availability of an already popular channel and helps mitigate against the loss of distribution channels like free newspapers.”

The deal between the CWU and the Royal Mail also sees postal workers awarded a 6.9% pay rise over the next three years and ends the threat of further strikes following a series of walkouts over pay, jobs and modernisation last autumn.

David Ellison, marketing services manager at ISBA, says: “The agreement is a step in the right direction – if it is ratified by CWU members.” He adds that ISBA wants a long-lasting agreement so that its members can plan direct marketing and integrated campaigns with confidence.

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