Whether you are a royalist, a republican or entirely neutral about the whole thing it was hard to ignore the coronation, the events which surrounded it, and of course the additional bank holiday.
This article tries to unpick the impact of the whole thing on businesses and the economy.
The coronation of King Charles III
The coronation is expected to have had a significant impact on businesses and the economy in the UK. While pubs, restaurants, and retailers appear to have benefitted from the anticipated surge in trade during the celebrations, the overall economy may have suffered due to the extra day off taken by workers.
Historical events like the coronation have the potential to boost sentiment and spending in an economy grappling with strikes, high inflation, and challenged living standards. Large national events typically lead to increased retail sales, and the coronation is expected to have been no exception, generating a significant uptick in consumer spending.
This expectation is indeed based on history. For instance, during the Queen Elizabeth’s Platinum Jubilee celebrations last year, grocery sales for the corresponding week were significantly higher compared to an average week. And unsurprisingly retailers prepared an array of commemorative merchandise, including biscuit tins, teddy bears, candles, and teacups, to capitalise on the historic occasion.
Luxury brands also seized the marketing opportunity, offering unique products associated with the coronation. From a one-of-a-kind gemstone ring costing nearly half a million pounds to sterling silver cufflinks and pocket squares, many luxury brands attempt to benefit from the royal association, attracting customers from both the US and EU markets.
The UK hospitality sector, which has been grappling with the aftermath of the COVID-19 pandemic, transport strikes and rising costs, will have received a crucial boost from the coronation. The event was expected to instil fresh confidence and anecdotal evidence suggests it did attract more customers to pubs, bars, and restaurants. Hotel occupancy rates in London were projected to reach 96% over the coronation weekend.
So, for the food and hospitality sector it looks like a resounding positive. Estimates suggest that the three-day weekend, including an additional public holiday on May 8, provided a substantial economic boost. The Centre for Economics and Business Research predicted a £337 million increase in tourism and spending in pubs, while Visit England expected a much higher boost of £1.2 billion from domestic travel.
However, the extra public holiday will also have resulted in a loss of output and diminished the overall economic benefit. Previous instances, such as the Queen’s state funeral, have demonstrated that the economy contracted partly due to the additional bank holiday. PwC estimates that a Monday public holiday costs the UK economy around £877 million net, even after considering the boost in consumer spending.
While the coronation festivities are expected to have had a positive impact on businesses, concerns have also been raised regarding the cost to taxpayers, particularly amidst a cost-of-living crisis. Buckingham Palace has promised to release details of the coronation’s expenses at a later date, highlighting the global interest and potential long-term benefits such occasions can bring.
The coronation of King Charles III almost certainly delivered a benefit to certain sectors, but is likely to have been a cost to the overall economy. While retailers, pubs, and restaurants were boosted by increased sales and footfall, the overall impact on the economy is expected to be dampened by the loss of output resulting from the extra public holiday. So, it looks like in fact the coronation was good for some businesses, but bad for the economy. And while many of us had a memorable long weekend, it is probably fair to say that, for many very positive reasons, we don’t want to see another coronation for many decades to come. In the words of the coronation service itself, “Long Live the King”.
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