Could the royal baby boost the economy?
23 April 2018
Spring is here, the sun is shining and a royal baby has arrived making some of us (see photos) feel a bit happier. It seems overdue. Consumer confidence has been dented in recent years as wages have failed to keep pace with inflation - leading to what economists call a squeeze on real incomes. Lower spending has seen several well known retailers forced to close shops, or even close down altogether. Could the arrival of a baby encourage a loosening of the purse strings? Views are mixed. But one firm is so confident it will that it's willing to put a number on it. Independent brand valuation and strategy consultancy Brand Finance estimates the boy will add PS50m to the UK economy before he reaches his first birthday. Chief executive David Haigh says: "The birth of the new prince is also a tremendous marketing opportunity for British producers and retailers of baby products who can reference the royal baby in their promotional campaigns." It's something upmarket baby and maternity products retailer JoJo Maman Bebe has observed to its benefit. Laura Tenison, the company's managing director, says: "The Royal Family and any news about them are a massive boost. "During HRH's pregnancy with Princess Charlotte she wore our (already named) Cream Princess coat - it sold out instantly. This pregnancy she wore it again." Following the births of Prince George and Princess Charlotte, Mothercare said it saw an increase in sales of its Heritage new-born clothing collection. The collection features more traditional prints based on red, white and shades of blue.  A spokesperson for the chain says the collection has continued to be a best-seller. But while a royal baby may be good for sales of individual clothing items, Philip Shaw, chief economist at Investec, there's not a lot in it for the broader UK economy. "Historically, a new royal baby tends not to have a material effect on the economy. And a major boost seems even more unlikely this time, bearing in mind how many households are strapped for cash," he says. Brand Finance has quite a list of items: souvenirs, memorabilia, commemorative coins, food and drink, and also by encouraging increased sales in child-related products such as pushchairs and infant clothing - as recorded by JoJo Maman Bebe. Mr Shaw admits that the new baby, plus the forthcoming wedding between Prince Harry and Meghan Markle, will help keep the Royal Family in the spotlight and help boost their popularity. "This flurry of royal activity should continue to encourage tourism into the UK. "So flights into the country, restaurant spending and accommodation, whether by professional suppliers or by the local AirBnB brigade, could all get a boost," he adds. The latest birth is the third child for the Duke and Duchess of Cambridge and is only fifth in line to the throne. On top of this, it's less than a month until Prince Harry and Meghan Markle tie the knot. Brand Finance's David Haigh said this will inevitably overshadow the royal baby's commercial impact. Its PS50m economic estimate for the latest birth is significantly smaller than the PS75m and PS100m respectively that it estimated for the  impact of the Duke and Duchess of Cambridge's first two children, Prince George and Princess Charlotte. "The third royal birth is - understandably - attracting less attention than the first two, and is additionally somewhat overshadowed by the upcoming wedding of Prince Harry and Meghan Markle," he says. Ms Tenison says rather optimistically that it never fades: "This [the royal Family] is the first topic of conversation in America, where we are currently opening JoJo stores. "The effect lasts... in a discreet way it will always be there." Mr Haigh's consultancy has also assessed the Royal Family as the gift that keeps on giving. He says the UK economy can expect an overall uplift - mainly from the from the Royal Wedding - of more than PS1bn in 2018, but, he says, the Monarchy provides an economic contribution every year. Brand Finance estimated 2017's boost at close to PS1.8bn.
Views are mixed. But one firm is so confident it will that it's willing to put a number on it. Independent brand valuation and strategy consultancy Brand Finance estimates the boy will add PS50m to the UK economy before he reaches his first birthday. Chief executive David Haigh says: "The birth of the new prince is also a tremendous marketing opportunity for British producers and retailers of baby products who can reference the royal baby in their promotional campaigns." It's something upmarket baby and maternity products retailer JoJo Maman Bebe has observed to its benefit. Laura Tenison, the company's managing director, says: "The Royal Family and any news about them are a massive boost. "During HRH's pregnancy with Princess Charlotte she wore our (already named) Cream Princess coat - it sold out instantly. This pregnancy she wore it again." Following the births of Prince George and Princess Charlotte, Mothercare said it saw an increase in sales of its Heritage new-born clothing collection. The collection features more traditional prints based on red, white and shades of blue.  A spokesperson for the chain says the collection has continued to be a best-seller. But while a royal baby may be good for sales of individual clothing items, Philip Shaw, chief economist at Investec, there's not a lot in it for the broader UK economy. "Historically, a new royal baby tends not to have a material effect on the economy. And a major boost seems even more unlikely this time, bearing in mind how many households are strapped for cash," he says.
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Will people spend more?
Brand Finance has quite a list of items: souvenirs, memorabilia, commemorative coins, food and drink, and also by encouraging increased sales in child-related products such as pushchairs and infant clothing - as recorded by JoJo Maman Bebe. Mr Shaw admits that the new baby, plus the forthcoming wedding between Prince Harry and Meghan Markle, will help keep the Royal Family in the spotlight and help boost their popularity. "This flurry of royal activity should continue to encourage tourism into the UK. "So flights into the country, restaurant spending and accommodation, whether by professional suppliers or by the local AirBnB brigade, could all get a boost," he adds.
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If they do spend, what will it be on?
Ms Tenison says rather optimistically that it never fades: "This [the royal Family] is the first topic of conversation in America, where we are currently opening JoJo stores. "The effect lasts... in a discreet way it will always be there." Mr Haigh's consultancy has also assessed the Royal Family as the gift that keeps on giving. He says the UK economy can expect an overall uplift - mainly from the from the Royal Wedding - of more than PS1bn in 2018, but, he says, the Monarchy provides an economic contribution every year. Brand Finance estimated 2017's boost at close to PS1.8bn.
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How long does the effect last?