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Why Royal Mail (IDS) Shares Barely Moved on the 2-Day Strike

Simon Mugo trader
Updated 30 Nov 2022

The Royal Mail, also known as International Distributions Services PLC (LON: IDS) share price barely moved today after the Communication Workers Union (CWU) commenced another 2-day strike to force the company’s management to increase their pay.

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


There is growing public and investor fatigue towards the strikes, given the damaging impact they have had on Royal Mail’s revenues. In addition, many British small businesses have faulted the strikes saying that they have disrupted their businesses since they rely on Royal Mail to send parcels across the UK.

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

According to small business owners interviewed by the BBC, many of them cannot afford to send their packages via other courier services because of the higher charges. Hence, they rely on Royal Mail to get their packages to customers across the country. 

While many businesses sympathise with the plight of Royal Mail workers, given the high cost of living, most people have faulted the timing of the strikes, which coincides with the busy Christmas shopping period magnifying the impact on businesses. 

IDS shares barely moved today despite the start of another two-day strike, with further strikes planned for 9, 11, 14,15, 23 and 24 December. The CWU has chosen the busy holiday shopping period to apply maximum pressure on Royal Mail’s management team. 

However, talks between the two sides have halted after the Royal Mail board said that its final offer of a 9% salary hike over 18 months was its final offer. The lack of progress in negotiations means that the company is now preparing for the next steps. 

Royal Mail has hinted in the past that it would fire some of the CWU workers as it restructures its business to become more competitive in the parcels industry against other firms. IDS has even hinted at separating its loss-making Royal Mail business from its GLS international parcels business, which is quite profitable. 

A lot could go wrong at this point; hence, we cannot rule out possible bankruptcy for Royal Mail if the strikes continue without any talk as both sides hold on to their hardline positions. 

*This is not investment advice. 

Royal Mail share price.

Source: IG.com

The Royal Mail (IDS) share price edged 0.69% as markets barely reacted to the latest strikes.


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