Royal Mail may now have a nice new structure at the top, with the creation of International Distributions Service (IDS), but the problems remain the same.
It has a large, radicalized union workforce that is very resistant to changing working methods.
Unlike the railroads, which have a future despite union strife, the Communications Workers Union (CWU) is walking a tightrope.
Strike action: Royal Mail has a large, radicalized union workforce that is highly resistant to changing working methods
The CWU wage demands and objections to modernization meet a background of declining use for ‘mail’.
Each successive strike causes a different part of the market to be eroded. With software such as Docusign and Dropbox, professional service providers such as lawyers and accountants are no longer dependent on the post.
HMRC now communicates with us online and allows us to pay our bills in the same way. Receiving a greeting or postcard is still appreciated, but that too is migrating to digital brands like Jacquie Lawson.
It would be a courageous board of directors to put in charge a postal service with a heritage dating back to 1516.
Questions would be asked about the future of Parcelforce, the part of the group with a promising future. A major political headache could be the future of the pension fund, which has a crown guarantee.
The dramatic step of insolvency for privatized companies is not unknown.
Then Secretary of Labor and Transportation Stephen Byers forced Railtrack into administration in 2001, sparking a long-running dispute with city agencies. It is hard to imagine a Tory government allowing the same thing to happen.
You should not think of the impact on the head of the king on our stamps. And who will deliver the official invitations to the coronation?
Administration would create a new set of problems. The future of IDS and the Royal Mail, in an era of internet shopping, has always been the European logistics offshoot GLS and Parcelforce.
Rishi Sunak and the government must step in and raise their heads if one of Britain’s most trusted and valuable services is not forgotten.
Beauty Parade
Walgreens Boots Alliance’s strong focus on the US healthcare markets makes the eventual sale of Boots a certainty.
If Boots’ second-quarter numbers are any guide, a sale should attract significant investor interest.
Ideally, an IPO or sales process would take place later this year. But with stock markets jittery due to bank uncertainty and credit tightening, Walgreens may now be looking to 2024.
If Roz Brewer, the high-profile CEO of Walgreens, could raise some money, it would be very helpful. Despite a vibrant underlying business, Walgreens suffered a loss of £5bn in the first half, largely due to an opioid-related lawsuit.
The company’s direction is unmistakable with the acquisition of Summit Health, which makes Walgreens one of the largest players in the US primary care industry.
Boots and its CEO, Seb James, are putting the best face on the future prospects. The most recent data shows sales up 16 percent in the three months to the end of February, with beauty products booming both in-store and online.
The group’s own innovative skincare brand No7 remains a major asset. Prospective investors trying to calculate margins and profits at Boots may find it more difficult to sort things out.
When Boots finally comes to market, there is a lot of work to be done. The relationship with the NHS is tricky and needs clarification.
And there are real questions about whether a store portfolio of 2,200 outlets, many of them in the wrong places, needs a major overhaul and revamp. Enough for the next owners to sink their teeth into.
Whiskey hunter
Farewell then to Ivan Menezes, who drinks his glass empty after ten years at the helm of Johnnie Walker-to-Guinness beverage giant Diageo.
He leaves a great legacy of strong shareholder returns, growth in the United States and a willingness to invest in new categories like Casamigos.
The difficult merger of Guinness and Grand Metropolitan in 1997 is a thing of the past.
Menezes is to his credit that he leaves behind a management team of talented women.
His American successor Debra Crew, who has a background in Kraft, Nestle and Mars, should hopefully bring her own zest to the orbit.
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