6th November 2009: Consumers and businesses alike breathed a collective sigh of relief at yesterday’s news that the third round of national postal strikes, planned for today and Monday were called off at the last minute. However, the Royal Mail has been left counting the impact of October’s two national strikes to the tune of £10 million per strike day, amounting to an estimated total of £40 million to date. The bill for UK plc is also considerable at £1.04 billion, according to new analysis conducted by shopping comparison site Kelkoo in conjunction with the Centre for Economics and Business Research.

With 25% of business mail having to be sent by other means for the duration of the recent industrial action, alternative arrangements are estimated to have cost businesses £737 million. And while further strike action has been called off, businesses will still face a long wait for the post, with a range of items expected to be delayed for up to a week and an estimated backlog of 56-69 million items.

Given their reliance on the Royal Mail to fulfil orders, online retailers have been hardest hit at a total cost of £156 million, as they were left facing an £85 million increase to their delivery costs and £71 million in lost sales or refunds as a result of undelivered items. The retail sector has been largely unaffected, but has still felt the impact (£35 million), while the publishing industry faces a loss in subscriptions from magazines of £5.7 million.

The importance of the Royal Mail cannot be underestimated. The UK currently spends approximately £11.7 billion on postal services. UK consumers spend £30 billion on items delivered by post or parcel delivery; postal delivery of magazines in the UK has an annual market value of £400 million; 6.5 billion invoices and other transactional data are sent by post each year and it is estimated that £75 billion of cheques are sent by mail each year.

In terms of the impact of the October postal strikes on consumers, they face a range of costs, which are not easily measured in financial terms. Many will put up with missing post, yet the report suggests that the combined costs in terms of interests for delayed payments and penalty charges imposed by financial intermediaries amounts to £108 million.

The regions in the UK which have been hardest hit by the postal strikes are London, with a cost to businesses of £187.1 million, and Scotland with a cost of £82.5 million. These two regions also face the biggest backlog, with 13.7 million items still to be delivered in London and 5.1 million still awaiting delivery in Scotland.

Bruce Fair, Managing Director of Kelkoo UK, comments: “Retailers and consumers have got an early Christmas present after union leaders agreed to a two month truce or ‘period of calm’ with Royal Mail bosses last night. It was looking like a chaotic lead up to Christmas which would have had a disastrous impact on online retailers. Disappointingly, it looks as though the upheaval may now resurface during the January sales, another key sales period for the UK retail industry. ”

“With the IMRG predicting that up to two thirds of corporate online retail customers are unlikely to return to the Royal Mail, and given the significant bill the company will need to pick up in the New Year, the Royal Mail could be in for some tough times if further planned action goes ahead.”