A big day for retailers and royalists alike

Barely had Prince William and Kate Middleton given the first TV interview about their engagement than retailers began taking advantage of the sales opportunity.

The wedding date has been set for Friday, April 29, but confirmation of the pair’s intention to tie the knot was enough on its own. Within hours Asda was selling £5 commemorative mugs and Tesco was running up dresses similar to that worn by the bride-to-be on TV that day. While she sported a £349 Issa number, the Tesco version will only cost admirers of the Middleton style £16 and was expected to be a sell-out.

The big grocers are always fast off the mark to grab a sale, but they are equally adept at getting bang for their PR buck. The question retailers of all sorts are asking themselves is whether the royal wedding will genuinely provide a boost to turnover.

Prenuptial boost

Analysts at retail research house Verdict Research admit it is difficult to quantify the impact of such occasions, but estimate that the royal nuptials could be worth as much as £620m to the UK economy.

Up to £400m of that could go directly into retailers’ tills and the balance to other industries, such as tourism. “The scale largely depends on how it will be executed,” says Verdict Research consulting director Neil Saunders. “If, as expected, it is a big set-piece event it could well capture the nation’s imagination and provide a fillip to the retail sector.”

Verdict Research suggests sales of wedding-related merchandise such as plates and tea towels could total about £44m and grocers could trouser sales of £360m as Brits celebrate the big day - which falls between bank holidays.

Shopping comparison specialist Kelkoo also expects an uptick for retailers because of the royal wedding. Research for Kelkoo by the Centre for Retail Research puts the benefit to retailers at £515.5m.

Food and drink is expected to account for 46% of the total, or £236.5m, while shoppers will splash out £222.3m on souvenirs and other wedding-related merchandise.

It is also estimated that the wedding will prompt tourist numbers to rise by 320,000 next summer, when visitors are expected to open their purses to the tune of £56.7m. Kelkoo brand manager Joe Cross says: “With the many challenges that 2011 is expected to bring for retailers, the £515.5m boost that the royal wedding is expected to deliver will undoubtedly provide some welcome relief.”

Some observers, however, are more cautious about how much difference the celebrations will make to retail performance. Arden Partners analyst Nick Bubb maintains: “People get a bit carried away about absolute sales and forget about the cannibalisation effect.” There are certainly opportunities to be had, he agrees, but says: “It won’t make or break anybody.”

BDO head of retail Don Williams is also circumspect. He thinks consumer spending may go up between 1% and 2% by the end of 2011, although volumes may be slightly down in challenging conditions. Total retail sales are worth about £260bn to £280bn a year, so a £400m injection, while welcome, would still be a small uplift.

But retailers are determined to make the most of the occasion, and those across many industry sub-sectors can see opportunities.

Wedding list

Souvenirs and gifts specialist Fancy That of London, which has tourist stores in locations such as Baker Street and Piccadilly Circus, is confident the event will be a big retail success.

“I think it will be better for us than the Olympics,” says managing director Adam Ficken. “People will be here to sightsee and they will be walking around the West End, not in Stratford.”

While Tesco stole the headlines with its Kate dress, others have benefited by association. Last week The Sun ran a feature on “how to dress like the future queen of England”, which identified high street fashions similar to some of Middleton’s best-known looks.

John Lewis, Topshop, Marks & Spencer, Debenhams, River Island, Coast, Schuh and Matalan were among those whose merchandise featured and therefore might expect a little of the Middleton glamour to rub off on them.

Given the excitement about her engagement dress, the likelihood is that there will be many more occasions in the run-up to the wedding that will allow retailers to make the most of opportunities right up to the big day - when the bride’s choice of dress is likely to widely replicated by commoners.

There has been much focus on Middleton’s engagement ring - a sapphire surrounded by diamonds that was previously worn Diana, Princess of Wales - and jewellers have been quick to promote equivalents.

Signet-owned H Samuel has spotlighted similar rings on its website - priced at £179 and £750 - and expects demand to grow for similar product. A spokeswoman says: “Precious stones other than diamonds have always been popular with the Royal Family and we predict they will be with the general public now.”

Goldsmiths, the chain owned by Aurum, has also been promoting a sapphire ring costing £999. Argos has got in on the act - the Home Retail-owned catalogue store group is selling a £199.95 ring - and TV shopping specialist QVC reported an 800% rise in sales of a £34.32 ring after the engagement was announced.

Argos jewellery trading manager Mark Steel says: “We are also sourcing a specially made version with a cubic zirconium sapphire on gold-plated silver, which we will be introducing in-store and online before the festive holiday for about £30.”

Something for everyone

Booksellers also anticipate their sales of wedding-related books to make good reading. Waterstone’s will focus on three or four during the Christmas period and thinks the titles should have wide appeal.

A Waterstone’s spokesman says books such as one produced by HarperCollins and The Sun should appeal to the popular market while another publisher’s title will appeal to the middle market. “It’s a nice demographic,” he says.

He adds: “What we haven’t seen yet is anything in the children’s arena. In 1981 Ladybird published a traditional book that did incredibly well. There’s an opportunity for Ladybird or someone else to take advantage of a once-in-a-generation event.”

Retailers of new media also think they could shift extra product. A Dixons Retail spokesman says: “Every major sporting event and the biggest public events can have a positive impact on TV sales, particularly when they catch the public imagination as the royal engagement has done.

“We are sure it will be a great spectacle, particularly in 3D, and we will ensure we have the best range and some fantastic deals in the run-up. And since Charles and Diana’s wedding, so much has changed in consumer viewing habits and in how news is consumed. Laptops, iPads, phones and digital radios all have a portable part to play this time round.”

Specialist retailers see royal openings too. Stamps retailer Stanley Gibbons is selling a commemorative cover and expects to mark the event with other items, perhaps presentation booklets of royal stamps through the ages.

Sales and marketing director Keith Heddle says it is important that a business such as his strikes the right tone. “We are a very traditional business,” he says. “We don’t want to be seen to be jumping on a bandwagon. We want to find appropriate product for our customers that celebrates the event.”

Heddle thinks that the wedding could potentially deliver “six-figure sales over time” for Stanley Gibbons and that products are likely to appeal both to “everyman in a stamp club in Reading” and the retailer’s investment customers - “people excited about the fact that they are owning a bit of history but are more interested in the returns”. While most of the retailer’s customers are British, he expects a wedding “buzz” from international shoppers in places such as the US and Commonwealth.

Variety store group 99p Stores has created a royal wedding list of party goodies such as porcelain dinner plates, cakes and even a 100-piece cutlery set - all at its single price-point. Director Hussein Lalani says: “We should do well on partyware.”

Clinton Cards is optimistic too.

Buying and marketing director John Robinson says: “The wedding will be the event of 2011 and we anticipate consumers’ appetite for related gifts and merchandise will spark a spending frenzy.” He also expects keen interest from overseas visitors and says: “We know tourists will want to take a piece of memorabilia home with them so our gifting range will be significantly increased for this market.”

Nobody will know for some months yet exactly what effect the wedding of Wills and Kate will have on retail but if the expected uptick does not occur it will not be for the lack of effort by store groups.

Ficken expects Kate and Wills merchandise will be popular in his shops for years to come because so many people visit London only once over several years. Diana merchandise is still among the most popular in his shops. “It’s fantastic news for us,” he concludes.

And one etailer should certainly benefit. Party Pieces, the party specialist founded by Kate Middleton’s parents, will no doubt benefit by association as loyal subjects get closer to royalty by bagging a few goodies from the bride-to-be’s mum and dad.