Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Retailers warned of ‘unsustainable’ online model

Online retailers face a steep rise in delivery costs because the current model is unsustainable for fulfilment firms, according to the boss of one of the UK’s largest distribution firms.

Jonathan Smith, chief executive of Yodel – which is owned by billionaire brothers Sir David and Sir Frederick Barclay – has warned that despite steep growth in the channel, delivery providers do not make any money, meaning service is affected.

He said Yodel, formed after DHL Express merged with Home Delivery Network, will renegotiate terms with retailers. Some may see double-digit percentage increases.

Smith said: “The growth in online has come at the expense of delivery providers. We have to do something different.” Smith said consumers’ natural resistance to pay for delivery is part of the problem.

Yodel, which works with retailers including Amazon, will offer an improved service with guarantees and penalties for late delivery, in return for higher fees.

It will also provide seven-day delivery over Christmas. The unprofitable parcel firm was criticised last Christmas despite delivering more than 99% of orders.

Yodel has 25% market share in deliveries to the home.

Readers' comments (1)

  • Not surprised to hear this. There also has to be a saturation point as which not everything can be delivered to the level that customers want.

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.