Journalist, editor and producer covering society, business, architecture, tourism, rural regeneration, conservation. I work/have worked for The Guardian, Telegraph, Times, Financial Times, Conde Nast Traveller, Business Life, Business Insider, Reader's Digest, Icon Films and the BBC. I also provide consultancy services to international brands.
Moments after Prince Charles twittered engagement congratulations on Nov 16, the nation was busily totting up the potential costs and profits of a Royal Wedding. Charles’ own wedding (the one to Diana back in 1981) is thought to have cost more than £30 CH million, but generated £680 million in retail sales, the equivalent of £2.04 billion in today’s money.
No-one really has the faintest idea of how much this wedding will cost, the guests, the dress, the entertainment, the banquets and so forth being unrevealed ( to me at least) at the time of going to press, but wild uninformed guesses put it at around £50 million . . . or £100 million. Anyway – a lot. But that’s not our concern because the cost of the wedding itself is being met by the Royal Household (albeit an institution we subsidize to the tune of £38.2m a year). The government (read ‘taxpayers’) will just pick up the bill for security and transport.
Policing the Pope’s recent four-day tour cost us £2m. But says the Department for Culture, Media and Sport, policing the route to Westminster Abbey (maybe not involving the 6,000 police and officers from royalty protection, diplomatic protection, CO19 and Special Branch who manned the route to St Paul’s Cathedral in 1981, but quite a few) as well as stewarding, handling international TV crews and festooning the place with flags and balloons, will probably come in at around £10m, 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 drop food, litter and royal wedding newspaper supplements on our streets. Westminster City Council reckons street-cleaning will cost £30,000-£40,000 more than it usually does. Less admittedly than it cost the GLA to clean up the mess revolting students left around Parliament and Trafalgar Square last year and far less than the £300,000 clean-up costs after Princess Diana’s funeral.
The gift of a bank holiday (thanks!) will also cost us. Back in 2007, the CBI calculated that adding an extra bank holiday 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 at around £2.9bn, lower now because most of us are unemployed anyway. But holidays have benefits too. Thanks to the wedding, and the convergence of bank holidays, employees will theoretically only be working three out of eleven days during this period. They’ll be very relaxed. So perhaps we should offset some of the costs against a reduction in the UK’s £4.4billion 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. The rather Tudorish wassailing landlords anticipate should perk up sales, however 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” and 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) predict an additional £236.5 million will be spent on celebratory food and drink. Neil Saunders of retail consultants, Verdict goes higher, reckoning “food and grocery retailers could cash in to the tune of £360million 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’d be a much bigger concern if the wedding was on Saturday” says Saunders, “because what we saw for Diana’s funeral (not a very nice thing to bring up, but the most tangible recent example we have) is 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 £290 billion a year is just a drop in the ocean, says Saunders, but wedding-related retail sales could be “life-changing” for those who trade in souvenirs.”
Memorabilia and souvenirs
The sale of things we wouldn’t buy otherwise is expected to generate £222.3 million. These are exciting times for producers of collectibles. Stanley Gibbons expects to sell lots of first day covers, and commemorative coins, and gold medals from the London Mint Office could raise £24.9 million. Royal weddings will even prompt us to buy £22.9 million worth of pens and stationery, apparently.
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 £18million on pottery in total. At the top-notch 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 and 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, the chance to make the 16,000 pieces of tableware to be used at the wedding buffet (not a breakfast, another break with tradition) or given to guests, and get much kudos, was put out to tender in April 2010 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.
Chris Hall from the British Ceramic Confederation says more than half of their domestic ware manufacturer members are producing souvenirs to mark the royal wedding. “Royal events provide a very valuable opportunity for companies to demonstrate their skill – the quality of the product enhances the reputation of the producer. There is obvious benefit to the manufacturer in terms of sales. One company has increased its workforce by 33% to cope with the orders! Another company reported expecting orders of approx. £1m. A third reported that 3,500 Royal Engagement mugs were sold when the engagement was announced. These are just snapshots.” Hall says 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 market 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, as a light-hearted touch, “a pair of teddy bears in full wedding gear” will represent 10-20% of the year’s turnover, but the effect of a popular royal event after something of a lull, he says, 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 onto the shelves. It was available to order online on the same day as 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 wedding souvenirs they’re busily preparing space for, “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 on January 11 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 demand.” Around 70% of his orders are coming from the US, along with emails “waxing lyrical” about the wedding. “Americans see this almost as a fairy tale” says Church, and buying stuff helps them feel a part of it.
Online is where to find much of the unofficial wedding merchandise too, things which meet neither the ‘permanent and significant’, or ‘good taste’ palace guidelines, like iPhone4 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 £10 million. Inevitably the hot seller is “a very similar, yet affordable, version” of the 18-carat sapphire and diamond engagement ring from Garrard of London. “The genuine ring comes in around a half-million dollars, whereas the Emitations.com version is a much more reasonable alternative at under $60. “ Well, you can’t argue with that. The company has been inundated with orders “The world fell in love with Princess Diana and her large, starburst sapphire ring back in 1981. Now almost thirty years later, the world is once again becoming captivated with the iconic sapphire, as well as the soon-to-be princess of England,” states CEO Au-Co Mai. Goldsmiths was reported as anticipating a 50% surge in sales this spring as young couples, heady with royal fever, trip down the aisle.
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 Nannette dress seen around the world in engagement photographs 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. Now Victoria Beckham looks set to gain the world’s most powerful patron. The wedding dress commission will be a shot in the arm for designer, not that they usually need it. (Incidentally, Paddy Powers, the bookies, had so many wagers placed on Bruce Oldfield they suspended betting back in November).
And of course, fashion isn’t just for girls. Trade should be brisk on Jermyn Street where Prince William shops at Turnbull and 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. They’ll 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.
Another small, troubled, specialist sector set to benefit is book publishing. The downward trend will be bucked as Britons buy six million commemorative books, biographies and albums, with a total value of £45 million. Apparently this is not to be confused with a sudden interest in reading. Says Neil Saunders, “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 at 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 and over at Hello! They saw it as a “once in a lifetime opportunity” for the title and expected 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 the sales of high-definition TV sets, just as the Queen’s coronation spurred people onto investing in their very first TVs back in 1953.
Street parties and celebrations
Expenses will be incurred, but on balance, having 6.5 million people in the UK marking the occasion is good for business. £97.5 million 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 twenty 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’etre, and the AbDab Party Company is celebrating as cardboard cut-outs of the happy couple, red, White & Blue table covers, streamers and balloons are snapped up by street party committees up and down the kingdom.
Interestingly, Kate Middleton’s parents, owners of 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 canapés flags, most of which have a cheery heraldic theme and are already out of stock. According to the Daily Mail, the website enjoyed an 18-fold increase in viewers following the engagement.
The expense of holding a street party has been a contentious issue. Thanks to the Traffic Management Act we can’t block our own thoroughfares, but must hire a professional traffic management company to do it. It will be a special day for these companies dedicated, as one explains, to “utilising teams of fully trained and qualified personnel help meet today’s increasingly demanding and complicated road traffic requirements”, and many are quoting upwards of £500 for holding no entry signs. But the people are revolting. Local Government Minister Bob Neill has called on councils to “help foster a sense of community spirit on this national day of celebration” and in some counties, the cost of being patriotic will be limited to a £21 Special Events license.
The industry set to gain the most by one couple’s exchanging of vows? Tourism. On an average year, the Royal family generates approximately £500 million for British tourism. We subjects, are a little blasé perhaps, but in a massive Visit Britain poll of potential foreign visitors 83% of Russians questioned said they would go to ‘Royal sites’, as would 79% of Brazilians, lots of Poles, Czechs and Mexicans. 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 royal wedding, boosting retail spending by £56.7 million.
London businesses will benefit from half of that, and hotels are pulling out all the stops with right royal hospitality from 3* London Docklands Royal Wedding Breaks to a package in the three-bedroom Royal Suite at the Hyatt Regency which comes with a former royal butler, champagne, canapés, chauffeur-driven limousine, a night at the opera, private chef and royal banquet, 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% the W Hotel in Leicester Sq, the St Pancras Renaissance, and the new 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 Scilly isles were among the contenders for honeymoon destination. Hoards of international journalists and TV crews landing on our shores in search of ‘royal stories’ have been dispatched “ to Anglesey where the royal couple will start married life, and to St Andrew’s” says Tess Longfield, Head of International Destination PR, “to Balmoral and Edinburgh Castle; and places with, if not a link to the royal couple themselves, to royal heritage.” They’ve done stories on British designers, possible gifts, and been to visit royal warrant holders including the firm that may or 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.”
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 the biggest broadcast event in history with a potential TV audience of 4 billion, a helpful kick-start to the new Visit Britain ‘You’re invited’ campaign to be launched next month [MAY].
The Balance Sheet
All things are relative, but the royal family is “mindful” that us subjects are tightening our belts and wallowing in economic gloom, and won’t want to be seen to be seen as being hooray extravagant. However, a little stardust, mass hysteria and excess (albeit just the sight of it) can crank up the spirits of a nation and inculcate a deep desire to spend, spend, spend, apparently. According to Bloomberg, a depressed British economy picked up pace after the coronation in 1953, silver jubilee in 1977, and that royal wedding in 1981. And as Joe Cross of Kelkoo which commissioned the CRR report says: “William and Kate’s big day will be a cause for universal celebration, and an inevitable by-product 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, 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 on the fortunes of the British tourism industry are long term and priceless. And you can’t say that about every couple’s nuptials. So: cheers! Good health! Hip hip!
SORREL DOWNER / BUSINESS LIFE. FIRST PUBLISHED 2011
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