The Royal Wedding
Thursday 28, April 2011
A global audience of billions is expected to tune in to this month’s royal nuptials. But who stands to make the most out of the wedding of the year?
Moments after Prince Charles tweeted engagement congratulations on 16 November last year, the nation began busily totting up the potential costs and benefits of a Royal Wedding. Charles' own wedding (to Lady Diana Spencer back in 1981) is thought to have cost more than £30m, but generated an estimated £680m boost in retail sales, equivalent to £2bn in today's money.
No one really knows how much the wedding of Prince William and Kate Middleton will cost, especially as so much of it is still shrouded in secrecy, but wild uninformed guesses put it at anywhere from £50m to £100m. A lot, at any rate. But it's not really our concern, since the cost of the wedding itself is being met by the Royal Household (albeit an institution we subsidise to the tune of £38.2m a year). The government (for which, read taxpayers) will just pick up the bill for security and transport.
Policing the Pope's recent four-day tour cost £2m. But, according to the Department for Culture, Media and Sport, policing the route to Westminster Abbey as well as stewarding, handling international TV crews and festooning the place with flags and balloons, will probably come in at around £10m. The price is hiked partly because everyone will be on bank holiday overtime pay.
Then there's the clean-up. Visit London anticipates 600,000 extra visitors over the wedding period, and they'll all no doubt be dropping food, litter and Royal Wedding newspaper supplements on our streets. Westminster City Council reckons street cleaning will cost £30,000 to £40,000 more than it usually does.
The gift of an extra bank holiday (thanks!) will also cost us. Back in 2007, the CBI calculated that creating an extra bank holiday in a year would cost the economy up to £6bn. The current assessment by the Department for Business, Innovation and Skills (for the UK excluding Scotland) puts loss of productivity somewhat lower, at around £2.9bn. But holidays have benefits too. Thanks to the wedding, and the convergence of bank holidays, employees will theoretically only be working three out of 11 days during this period. So perhaps we should offset some of the costs against a reduction in the UK's £4.4bn a year work-related stress bill.
Potential profit and loss are united in the decision to allow pubs in England and Wales to stay open until 1am for two nights. Landlords anticipate it will perk up sales, but even the person whose idea it was, crime prevention minister James Brokenshire, says, "We are mindful that late night drinking can lead to crime and disorder and public nuisance." So we can probably expect a corresponding rise in public-funded control and patch-up activity.
Despite some grumblings that the wedding would have been better for retail if scheduled for the heady al fresco days of summer, the Centre for Retail Research (CRR) predicts an additional £236.5m will be spent on celebratory food and drink. Neil Saunders of retail consultants Verdict goes higher, reckoning that, "Food and grocery retailers could cash in to the tune of £360m as consumers buy extra treats to celebrate the occasion, as well as Champagne and wine to toast the happy couple."
Shops on the big day will be quiet, but thank goodness William and Kate picked a Friday. "It would be a much bigger concern if the wedding was on Saturday," says Saunders, "because what we saw for Diana's funeral was that sales everywhere plummeted because people were inside glued to the television. But as Friday's not a big shopping day anyway it's not going to have a massive negative effect."
The additional spend in a market that generates £290bn a year is just a drop in the ocean, says Saunders, but wedding-related retail sales could be "life-changing" for those trading in souvenirs.
COMMEMORATIVE PLATE ANYONE?
The sale of things we wouldn't buy otherwise is expected to generate £222.3m. These are exciting times for producers of collectibles. Stamp dealer Stanley Gibbons expects to sell lots of first day covers, and commemorative coins and gold medals from the London Mint Office could raise £24.9m. The Royal Wedding will even prompt us to buy £22.9m worth of pens and stationery, it seems.
But "nothing says congratulations like your face on a mug," as a spokeswoman from Asda reminds us. We'll buy three million of them and spend around £18m on commemorative china in total. At the top end of the UK china manufacturing industry this is a way for one beleaguered British institution to benefit by celebrating another. Neatly, profits from the Royal Collection's wedding range of tankards, plates and pill boxes covered in doves, ribbons, hearts, stripes, coronets and faces go towards the care and conservation of the Royal Collection of other royal treasures and trinkets on show in a palace near you.
The prize commission of the 16,000 pieces of tableware to be used at the wedding buffet or given to guests was put out to tender and didn't go to a company in Stoke-on-Trent but to the Guangxi Sanhuan Group in Southern China. ("Honoured and proud!" says Chen Cheng, the executive director.) But there are still other opportunities for the UK's own quality producers.
The British Ceramic Confederation's Chris Hall says that more than half of its domestic ware manufacturer members are producing wedding souvenirs. "Royal events are a very valuable opportunity for companies to demonstrate their skill - the quality of the product enhances the reputation of the producer. One company has increased its workforce by 33 per cent to cope with the orders. Another reported that 3,500 Royal Engagement mugs were sold when the engagement was announced. These are just snapshots." Hall adds that several companies are also seeing large retailers come back to them after previously placing orders overseas, and so hope to sustain the boom.
"With the flight of manufacturing to the Far East, those left here are becoming something of a rarity," says Hugh Gibson, chairman and chief executive of Royal Crown Derby. "Exports are strong but with the amount of doom and gloom about, this market, our major one, is very difficult. In any recession we tend to suffer quite badly because a piece of china is a purchase you can easily postpone, so this Royal Wedding is a real boost for us and comes in the nick of time."
The company's commemorative range, which includes a double-handed loving cup, plates, a Welsh dragon and "a pair of teddy bears in full wedding gear", will represent 10-20 per cent of the year's turnover, but the effect of a popular royal event after something of a lull, says Gibson, has long-term benefits and "will wake a sleeping market". They've had press coverage around the world, and national TV coverage in Japan has already led to two substantial orders from retailers.
Asda's mug may not be in the same league, but it was the first engagement souvenir on to the shelves, available to order online on the day of the engagement announcement and available in stores five days later. Says PR, Bee Hessell, "We've now sold thousands, which is a testament to how popular the wedding is around the nation." Of the other wedding souvenirs they're busily preparing space for, Hessell says, "It's fair to say that tea towels are not off the agenda!" Interestingly, Buckingham Palace did issue a directive vetoing the use of Prince William's coat of arms or official portraits of the couple on tea towels but retracted it in January in response to cries of dismay up and down the land.
In a new Royal Wedding souvenir twist, around a quarter of the merchandise will be bought online. Among the sites well positioned to profit are Peter Jones China (selling limited edition collectibles, from the Steiff Royal Wedding 'Catherine Bear' to Swarovski and Caithness Glass paperweights) and the UK Gift Company, also offering brand name commemoratives and hand-embroidered cushions. "Charles and Diana's wedding was obviously huge," says owner Stephen Church, "but this is bigger than any other, simply because it's the biggest royal event of the internet era. The massive global demand has taken everyone by surprise." Around 70 per cent of his orders are coming from the US, accompanied by emails "waxing lyrical" about the wedding. "Americans see this almost as a fairy tale," says Church, and buying things helps them feel a part of it.
Online is where to find much of the unofficial wedding merchandise too: items that meet neither the 'permanent and significant' or 'good taste' palace guidelines, such as iPhone slider cases and fake invites. This lower end of the souvenir market, stretching from cheap and cheerful to flags and bunting and on down to tat is itself valued at £26.9m.
Sales of replica jewellery are expected to be in excess of £10m. Inevitably the hot seller is "a very similar, yet affordable version" of the 18-carat sapphire and diamond engagement ring. "The genuine (Garrard) ring comes in around a half-million dollars, whereas our version is a much more reasonable alternative at under $60," says Emitations.com CEO Au-Co Mai, who says the company has been inundated with orders. "The world fell in love with Princess Diana and her large, starburst sapphire ring back in 1981," she says. "Now almost 30 years later, the world is again being captivated by the iconic sapphire, as well as the soon-to-be princess of England." Goldsmiths also sells a version of the engagement ring - for £999 - and is reported to be anticipating a 50 per cent surge in sales this spring as young couples, heady with royal fever, pop the question.
Fashion shops and labels are selling out of whatever Kate Middleton wears. 'Middleton' is the season's top fashion buzzword (according to the Global Language Monitor), replacing Gaga, as in Lady Gaga, who wears dresses made of meat. Oh, the vicissitudes of fashion. Kate of course prefers LK Bennett and Whistles. And Reiss. "Her style and influence will definitely have an impact on customers' buying behaviour," says founder David Reiss — with good authority. The £159 three-quarter length Reiss Nanette dress seen around the world in engagement photos shot by Mario Testino was re-stocked and flew off the shelves here and in the US. The promotion of Reiss and of Issa, designer of the blue dress worn for the engagement announcement (and 'copied' by Peacock and Tesco for under twenty quid) will continue for years on collectible plates. It goes without saying that whoever designs the Royal Wedding dress will get a significant shot in the arm.
BY ROYAL APPOINTMENT
And, of course, fashion isn't just for girls. Trade should be brisk on Jermyn Street, where Prince William shops at Turnbull & Asser, Daks and, for umbrellas and leather goods, Swaine Adeney Brigg. These businesses have the added benefit of holding royal warrants. A Royal Wedding is boom time for the 850 favoured ones. Professional and discreet, they'll not blow the whistle on who's creating the royal underwear, the Queen's hat and so forth, but the spotlight on the monarchy will certainly be casting a warming glow over their wares.
For small, specialist firms, a royal commission can turn fortunes around, hence the excitement at William Cowley, a 150-year-old family business in Newport Pagnell that will be providing the vellum for the marriage certificate. Speaking to the Milton Keynes Citizen, manager Paul Wright said, "This is a huge, huge honour for us. It is absolutely massive and will help put Newport Pagnell on the map." Local MP Mark Lancaster concurred, saying that Newport Pagnell's association with the Royal Wedding will be a massive boost for the town.
A GOOD READ
Another troubled, specialist sector set to benefit from the wedding is book publishing. The downward trend will be bucked as Britons buy six million commemorative books, biographies and albums, with a total value of £45m. But apparently this is not to be confused with a sudden interest in reading. According to Neil Saunders of Verdict, "They're not seen as books to read but as books for display. I think people are prepared to buy those. They're a bit more useful as a keepsake than, say, a china plate, which you're not going to eat off and will probably get shoved to the back of a cupboard. A book is something people can keep on a coffee table and flick through. It's got the souvenir aspect and it's practical as well."
Can a Royal Wedding save the British media industry? Possibly not, although circulation increased for many national newspapers in response to forensic engagement coverage. Over at Hello!, publisher Charlotte Stockting sees it as a "once in a lifetime opportunity" for the title and expects royal coverage to draw in new advertisers. The wedding is not going to be a vehicle for 3D television coverage as hoped by 3D TV vendors, but Jana Bennett, the director of BBC Vision, does expect it to boost sales of high-definition television sets, just as the Queen's coronation spurred people to invest in their very first TVs back in 1953.
Expenses will be incurred but, on balance, having 6.5 million people in the UK marking the occasion is good for business. £97.5m of the increased food and drink spend will go on alcohol. Among the half a million bottles of Champagne will be limited edition Prince William Champagne from Halewood International, which has owned the brand for 20 years and must have been longing for this day. Pieminister is producing "pies to commemorate the historic event" (the 'Kate & Wills', made with British beef, and the 'Royal Pear'). Manufacturers are fulfilling bulk orders of flags, the Cotton Bunting Company is justifying its raison d'être, and the AbDab Party Company is celebrating, as cardboard cut-outs of the happy couple, red, white and blue table cloths, streamers and balloons are snapped up by street party committees up and down the kingdom.
Interestingly, Kate Middleton's parents, owners of party suppliers Party Pieces, stand to benefit financially from the Royal Wedding with the launch of a British Street Party range, which includes 'I heart GB' napkins, party platters, cake stands and canapé flags, most of which are already out of stock. According to the Daily Mail, the website enjoyed an 18-fold increase in users following the engagement.
A LONG WEEKEND
In an average year, the royal family generates around £500m for British tourism. Some subjects may be a little blasé, but in a massive Visit Britain poll of potential foreign visitors, 83 per cent of Russians questioned said they would go to 'royal sites', as would 79 per cent of Brazilians, followed by Poles, Czechs and Mexicans, all at more than 70 per cent. The wedding razzmatazz has naturally piqued that interest still further. An additional 320,000 overseas visitors are expected to travel to the UK especially for the event, boosting retail spending by £56.7m.
London businesses will benefit from half of that, and hotels are pulling out all the stops with right royal hospitality, from 3-star London Docklands Royal Wedding Breaks to a package in the three-bed Royal Suite at the Hyatt Regency, which comes with a former royal butler, champagne, canapés, chauffeur-driven limo, a night at the opera, private chef and royal banquet, a visit from an NBC royal commentator and a tour of various palaces with the Chair of the Guild of Registered Tourist Guides, plus a signed copy of William and Kate - The Love Story. With hotel bookings up by 40 per cent the W Hotel in Leicester Square, the St Pancras Renaissance and the refurbished Four Seasons couldn't have timed their openings better.
But the halo effect benefits the UK as a whole. The online tourist board site Simply Scilly saw a spike in traffic following a rumour that the Isles of Scilly were a contender for the honeymoon destination. According to Tess Longfield, head of International Destination PR, hordes of international journalists and TV crews are already landing on our shores in search of 'royal stories', heading to "Anglesey, where the royal couple will start married life, and to St Andrews, to Balmoral and Edinburgh Castle, and to places with a link, if not to the royal couple themselves, to royal heritage." They've done stories on British designers and possible gifts, and been to visit royal warrant holders including the firm that may or may not be making the hat for the Queen. "It's all speculation whether they are involved in the wedding, but it gives businesses an opportunity to promote themselves," says Longfield.
The publicity is priceless. Having a young, modern couple in leading roles turbo-charges Britain's cultural pulling power. The wedding is predicted to be one of the biggest broadcast events in history with a potential TV audience of four billion, a helpful kick-start to the new Visit Britain 'You're invited' campaign to be launched next month.
THE BALANCE SHEET
All things are relative, but the royal family is "mindful" that its subjects are tightening their belts amidst economic gloom, and won't want to be seen as extravagant. However, a little stardust, mass hysteria and excess can crank up the spirits of a nation and fire up a desire to spend, spend, spend, it seems. According to Bloomberg, a depressed British economy picked up pace after the Coronation in 1953, the silver jubilee in 1977 and that royal wedding in 1981. And as Joe Cross of Kelkoo, which commissioned the Centre for Retail Research report, says: "William and Kate's big day will be a cause for universal celebration, and an inevitable byproduct of this will be an increase in retail spending."
The Royal Wedding is a very profitable venture. The immediate boost in retail will be welcomed by supermarkets, as well as china, vellum, pie and bunting manufacturers, and will further the expansion of Chinese industry. But more importantly, that feel-good factor plus the effect of round-the-clock global coverage of the UK are long term and priceless. And you can't say that about every couple's nuptials.
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