The impact of the Queen’s death on business and retail
Retailers and businesses across the UK are bracing themselves for a period of uncertainty following the death of Queen Elizabeth II. The long-term impact could be the demise of low-value coins, changes to the postal service and a shake-up of Royal Warrants. The financial impact of an unscheduled Bank Holiday for Queen Elizabeth’s State Funeral could also be significant, says the delivery expert ParcelHero.
ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘Although in many ways long expected, the death of Queen Elizabeth II has still come as a shock to many. It remains to be seen how it may impact on consumer confidence during a period of uncertainty and financial turmoil. There are some significant ways in which we can forecast its impact on retail, manufacturing, and deliveries, however. It’s already clear that retailers are having to tread carefully during this sensitive period to avoid any missteps.
Getting the right ‘tone’
‘Royal occasions are usually associated with celebrations and an uptick in consumer spending. The sombre nature of next Monday’s Bank Holiday is very different.
‘While many companies have been swift to launch commemorative items, from cushions to bags, to celebrate the late Queen’s reign, they must carefully gauge the national mood.
‘For example, one online fashion store, normally noted for its skilful social media messaging, seems to have unintentionally struck the wrong tone by appearing to promote a range of largely unrelated clothing in a feature commemorating the Queen. Its customers took to Twitter to complain about the seemingly “disrespectful” edit.
Conversely, holiday company Center Parcs had to backtrack over its plans to shut entirely for the funeral, as customers felt this was going too far. Its original decision was to ask guests to leave its sites completely on the day of the Queen’s funeral and not return until the day after. It said the decision had been made “as a mark of respect” but customers with existing bookings complained it showed little respect for guests.
Queen’s State Funeral Bank Holiday
‘Many retailers, including department stores and supermarket chains, have chosen to close their stores on 19 September, the day of the Queen’s funeral. Unlike other Bank Holidays, this is an event that employers will not have planned for. Without a corresponding significant uptick in sales of food, drink and commemorative merchandise sales, such as there was for this summer’s Platinum Jubilee, the day could represent a significant loss of income for some retailers.
‘While some stores, such as Royal Warrant holders John Lewis and Waitrose, swiftly announced they would close for the entire Bank Holiday, some other major supermarkets proposed only a partial closure between 10am and 2pm. However, as soon as the likes of Sainsbury’s announced they would close all their supermarkets for the entire day, most other large retailers quickly followed suit. Only supermarket chains’ local convenience stores are expected to open.
‘Contrary to what many people assume, there is no automatic statutory entitlement to Bank Holidays as annual leave. Instead, it’s down to employers’ discretion and the wording in employees’ contracts.
‘If a contract states employees are entitled to “all bank and public holidays” or “all public holidays” as paid leave, the employer must grant the extra day off. However, if no mention is made of Bank Holidays in an employee’s contract, then their employer can require them to work on the additional public holiday.
‘In addition, there will be no traditional postal services on the day of the funeral and Post Offices will be closed.
All change for change
‘All English currency, from a penny piece to a £50 note, features the late Queen’s image. This money will stay in use for some time to come. Those old enough to recall pre-decimalisation shopping will remember finding pennies bearing the image of numerous former monarchs.
‘In time, new Charles III coins will be stamped. Businesses still largely wedded to cash may be in for a shock at this point, as the move to produce new currency may hasten the demise of lower value coins.
‘The Bank of England won’t say how much it costs to produce a penny piece, but we have a close American equivalent as a useful comparison. While we can’t be sure how much rising steel and copper prices have affected the cost of producing new 1p coins, 2017 research showed that it cost 1.8 cents to produce one U.S. penny. The cost and scale of producing new 1p pieces, and even 2p pieces, might mean they are phased out, rather than replaced by new ones bearing King Charles III’s head.
‘That phasing out could be sooner than generally expected. The UK’s Royal Mint, the government-owned company that produces coins for the country, revealed in 2016 that 60% of 1p and 2p coins are used only once, while 8% of pennies are thrown away. So low denomination coins may disappear from circulation more quickly than we might think.
‘New bank notes will also need to be printed bearing the King’s head. Coincidentally, the last paper notes in circulation, for £20 and £50, must be used by the end of this month (September 2022).
The Royal Warrant
‘“By Appointment” signs feature on many of the 800-plus company websites that hold Royal Warrants. It’s traditionally regarded as a selling point, but it’s possible they have less relevance in the era of internet shopping.
‘Those companies granted a warrant by the Queen will have to discontinue the use of the Royal Arms, or reapply to the new monarch, and prove they “supply products or services on a regular and ongoing basis to the Royal households … for not less than five years out of the past seven.”
‘It’s not illegal for them to remain on display for now, since companies have two years to remove all mentions following the death of a Royal, but in the era of instant internet updates, this extended period does look a little old-fashioned.
‘Will all companies decide it is worth their while to renew their warrant? There are some who argue that warrants may have had their day. They are only granted to companies that provide goods to the Royal Household. Today, the UK economy is based more around services than manufacturing. Professional service providers to the Royal Household, such as bankers, brokers, agents, solicitors, employment agencies, training providers and veterinary services are not eligible for warrants, which makes the system less relevant.
‘Not every company that holds a Royal Warrant even shows the arms and “By Appointment” wording on their site anymore. Boots and Jaguar Land Rover, for example, no longer usually feature their warrants prominently on their websites. Does that signify a change in public opinion about their relevance?
‘It’s also less a mark of quality and longevity than it was. Holding a warrant didn’t guarantee the future of companies such as fashion store chain Austin Reed (which entered administration in 2016), car manufacturer Daimler (brand dormant since 2010) or opticians Dollond & Aitchison (merged with Boots opticians in 2009, with all branded stores closing by 2015).
‘Just like our money, every UK stamp also features an image of the Queen. Like coins, these stamps won’t become instantly unusable but will eventually be superseded by ones bearing the inset image of the new King.
Coincidentally, all standard first- and second-class stamps without a barcode attached are scheduled to be withdrawn by 31 January, 2023. To avoid doubt, most UK courier services, such as ParcelHero, use printed labels and don’t need stamps.
The Queen’s Royal cypher also appears on over 60% of the UK’s 115,000 postboxes. New boxes not already in production will carry the new King’s mark, although not in Scotland where the Scottish crown is used instead.