The boss of Royal Mail has said that disputes with unions over pay have stalled transformation plans.

The warning comes after the company posted a slump in sales and told shareholders that weaker parcel demand and “stalled”  cost savings will weigh on its outlook for the year.

With bosses saying that the business lost £1 million each day over the latest quarter.

The news comes just days after more than 115,000 postal workers at Royal Mail voted to strike over pay.

Which is expected to see the biggest industrial action to hit Britain this summer.

After a total of 97.6% of those who voted backed strikes, on a turnout of 77%, in protest at a 2% pay offer, the Communication Workers Union (CWU) said.

Now the Royal Mail Chief Executive Simon Thompson has spoken out saying: “I am ready to talk about pay and change at any time. But it has to be both.

“When we previously spoke to the unions we said there needed to be an improvement in productivity, but it has not gone forwards but backwards.

“Without change this will continue, and obviously we do have concerns over the impact from yesterday’s CWU announcement.”

He said the dispute with the unions has stopped it from enacting changes it needs to fulfil parts of its £350 million cost efficiency programme, highlighting that there “is now a risk worth £100 million”.

The business said other cost savings are “on track”, such as through infrastructure changes, although it also saw headwinds from Covid-19 absences.

The business said other cost savings are “on track”, such as through infrastructure changes, although it also saw headwinds from Covid-19 absences.

Later on Wednesday, Royal Mail confirmed that it posted its adjusted operating loss of  £92 million for the three months to the end of June after lower volumes.

Highlighting another decline in letter demand, while parcel numbers grew by 1% following a 14% increase in the UK.

The firm has warned investors that the rest of the financial year will be affected by a “weaker parcels market”.