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Royal Mail (IDS) Shares Fall As Strikes Continue. What’s Next?

Simon Mugo trader
Updated 14 Dec 2022

The Royal Mail, also known as International Distributions Services PLC (LON: IDS) shares, have fallen 16.8% in the past month as the Communication Workers Union (CWU) plans more industrial action during the busy festive season, causing the company massive losses.

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YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Workers represented by the CWU have planned industrial action for today, Wednesday, 14 December, Thursday, 15 December, Friday, 23 December and Saturday, 24 December 2022.

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YOUR CAPITAL IS AT RISK. 68% OF RETAIL CFD ACCOUNTS LOSE MONEY

Royal Mail has urged customers to post their parcels and letters early to avoid being impacted by the industrial action. 

However, the disturbing thing about the ongoing strikes is that negotiations between the CWU and Royal Mail have stalled as the firm reiterates that it had made its final and best offer to the striking workers. Still, the CWU wants more, yet the company is not budging.

Royal Mail appears ready to weather all the strikes organised by the CWU and may be looking for alternatives that do not involve the CWU. It is no coincidence that the CWU has organised its strikes during the busy festive shopping period. 

The workers union chose its industrial action dates to coincide with the busy Christmas shopping period to force Royal Mail’s management to acquiesce to their demands. Unfortunately, the strategy is not working as the company maintains that it will not revise its final offer. 

Some British High Street retailers have asked their customers to forego online shopping and embrace physical shopping if they want to receive their goods in time for the Christmas holidays. The situation at Royal Mail is getting worse if the current stalemate is not resolved.

The parcels and mail delivery company is already struggling to stay afloat, and the strikes are not helping. The management team is looking at all viable opportunities, especially since the CWU said it would continue the industrial action in the new year. 

One option floated by the management is to separate the Royal Mail business from its IDS business, which remains profitable and is not prone to employee issues facing Royal Mail. 

The separation of the two businesses would leave Royal Mail to fend for itself, posing an existential threat to the business. If the opportunity arose, shareholders would gladly vote to separate the two businesses. 

*This is not investment advice. 

Royal Mail (IDS) share price.

The Royal Mail (IDS) share price has fallen 16.78% in the past month and could keep falling.


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading