Consumer spirits are low but as a summer of big events nears, kicked off by the Diamond Jubilee, retail could have a moment in the sun.

British Fashion Council chairman Harold Tillman and Jasmine Guinness get the Jubilee celebrations started in London’s West End

At the end of April last year, retailers were able to look back on the month with a smile.

After the warmest April on record, and helped by Easter and an extra bank holiday for the royal wedding, like-for-like sales had surged by 5.2% across the industry.

What a difference a year makes. As May Day arrived this time around, store chiefs were looking back on the wettest April in 100 years and the leaden skies were mirrored by a cloudy economic outlook following the UK’s slip back into recession.

But a summer of hope may not be out of the question for retailers, as national celebrations and sporting spectaculars hove into view.

As with last year it will be up to the royals to kick-start the festivities as the country celebrates the Queen’s Diamond Jubilee. Hard on the heels of the Jubilee comes the Euro 2012 football tournament and the season is rounded off by the London Olympics.

Elizabeth II and Prince Philip after Silver Throne Jubilee 1977

Elizabeth II and Prince Philip after Silver Throne Jubilee 1977

If last year’s royal wedding is a pointer, the Queen’s Jubilee could provide a much-needed boost to sentiment. Last May’s Gfk NOP Consumer Confidence Index showed a leap in optimism, which the company’s head of social research Nick Moon puts down to the nuptials. Ahead of the Jubilee he says: “I wouldn’t be surprised if there’s an upturn, but not on the scale of last year.”

Sales as well as sentiment rose in April 2011 and a variety of retailers benefited. Total revenues climbed 6.9% in April 2011. Party food, snacks and champagne were in demand from food retailers as the nation celebrated. Even the hard-pressed books sector, which was still down year-on-year, received a “modest boost” from royal wedding titles, the BRC reported.

There may be some similar uplifts for the Jubilee. A study by the Centre for Retail Research, for Kelkoo, estimates that the Jubilee and Olympics combined should deliver a year-on-year sales increase of 1.3% between June and August and that an additional £1.07bn will be spent.

Of that, about £685m is expected to be spent on celebrations, while souvenirs and memorabilia is expected to come in around £307m, and tourism to account for £77m.

Flying the flag

Among the biggest supporters of the Jubilee is supermarket group Sainsbury’s, which is backing some of the key events during the festivities. The grocer’s chief executive, Justin King, expects the Jubilee to deliver the sort of commercial impact that would typically be experienced over Easter.

Sainsbury’s is a partner of the Jubilee beacons initiative. More than 2012 such beacons, a traditional feature of jubilees, are expected to be lit on the evening of Monday, June 4. The retailer is offering “significant discounts” to beacon holders as they prepare for the big night.

Similarly, Sainsbury’s is also a corporate partner of the Thames Diamond Jubilee Pageant, a 1,000-vessel flotilla from Putney to Tower Bridge on Sunday, June 3. And the grocer is holding a Jubilee Family Festival in Hyde Park, which an anticipated 50,000 people per day will attend on the Saturday and Sunday of the weekend.

In-store, Sainsbury’s will mark the occasion with a competition to create a Jubilee celebration dish using Bramley apples – “a quintessentially English ingredient”, the retailer says. The winning dish will be sold exclusively in Sainsbury’s stores around the jubilee.

For King, the Jubilee – followed by the Olympics – is a moment to try to shift the national mood. In comments posted on Sainsbury’s website this week following last week’s downbeat economic news, King makes the plea: “Yes, the economic environment is challenging, but let’s also focus on the reasons to be cheerful – the unique opportunities to come together and celebrate the Queen’s Diamond Jubilee, the Olympics and the Paralympics, of which Sainsbury’s is the first ever sole sponsor – and make this a year like no other both for Britain and British business.”

As with Sainsbury’s and its Bramley apple campaign, brands and other retailers alike are also coming up with celebratory product ideas to create a sense of fun and benefit from patriotic associations.

Selfridges Oxford Street has opened its Big British shop to mark the Queen’s Diamond Jubilee

Selfridges Oxford Street has opened its Big British shop to mark the Queen’s Diamond Jubilee

Primark owner Associated British Foods, for instance, is rebranding its Kingsmill loaves as Queensmill. Heinz and Kellogg’s are introducing limited- edition heritage packaging.

Waitrose is promoting its Inspired by Britain range, while The Co-op is providing food to organisers of street parties. Asda is backing the Big Jubilee Lunch.

Retailers also aim to make the most of the summer’s potential with store revamps, such as that of John Lewis and Hamleys in London’s West End, as well as the debut of the new Burberry store on Regent Street in June.

Marks & Spencer’s latest marketing campaign clicks into the mood of “a very British summer”, while Tesco is running a promotion around ‘the Great British Summer’. Department stores including Selfridges and Harvey Nichols have also launched window displays and shop-in-shops.

Fashion show

There are likely to be opportunities too for fashion retailers. Although the Queen, of course, will be the centre of attention, the royal family now has a stylish new member – the Duchess of Cambridge.

Ever since her engagement to Prince William when she was plain Kate Middleton, what she has worn has frequently boosted retailers’ sales, ranging from Reiss to supermarket brands.

Reiss’s website crashed such was the demand for the dress worn by Middleton when she met the Obamas, and when she was pictured in coloured jeans, sales of a similar George at Asda style rocketed by 88%.

BDO head of retail Don Williams observes: “You see in fashion how well brands can sell if they’re seen on the right lady.” He thinks brands and products with a strong English or British image are well placed to deliver a Jubilee sales uptick.

London, which is hosting the big Jubilee events, is likely to receive a fillip, although retailers do not anticipate “spectacular” revenue increases. American and European visitors are likely to account for a sizeable proportion of the spending.

Next’s range of Jubilee clothing and homewares

Next’s range of Jubilee clothing and homewares

The New West End company estimates at present that there will be about 1.2 million people in the district over the four days of the Jubilee and takings will amount to about £100m. On a typical ‘good’ weekend there would be about 500,000 to 600,000 visitors and takings of between £60m and £70m.

On Tuesday, the New West End Company unveiled its ‘Great British Fashion Flag Showcase’, when 147 union flags – including 10 dedicated fashion flags – were raised ahead of the Jubilee celebrations. There will be 500 flags around the West End altogether including on Bond Street, Regent Street and Piccadilly.

The event was backed by model Jasmine Guinness and Harold Tillman, chair of the British Fashion Council. Prime Minister David Cameron gave the initiative his blessing.

Cameron said: “As the UK gears up for the London 2012 Olympic and Paralympic Games and the Queen’s Diamond Jubilee, there’s no better time to celebrate the best that Britain has to offer.

“Contributing over £2bn to the UK economy, with world-renowned fashion designers, fantastic shopping and distinctive style, our fashion industry exemplifies British creativity, passion and entrepreneurship.”

Williams says: “London is fortunate in that it’s a global city. London is doing reasonably well. It’s not where the pressure is.” Can the rest of the country similarly expect to participate in a Jubilee windfall? And even if the Jubilee boosts the feel-good factor and brings a bit of sales momentum, the fear is it may not be sustained.

That was the case after the royal wedding last year, when the positive impact proved short-lived. In May, the BRC-KPMG Sales Monitor recorded a 2.1% like-for-like fall.

And the improvement in sentiment that came immediately after the event was wiped out within a few months, recalls GfK NOP’s Moon.

Just the beginning

One difference this year is that the Jubilee is the start of a summer of big events. Euro 2012 begins the weekend after. The tournament is being held in Poland and the Ukraine and any impact on retail will depend on how England perform. The omens are not particularly good however, with an unsettled team and Fabio Capello’s likely replacement, Roy Hodgson, only just named this week after a protracted search.

The World Cup brought improved sales of products such as TVs as sports fans got ready. Euro 2012 won’t be on the same scale but there may be opportunities for eye-catching promotions. Electricals group Dixons is reprising the ‘Cash for Goals’ promotion it ran successfully during the 2010 World Cup.

Shoppers spending £549 or more on TVs and laptops at Currys and PC World will be eligible for £10 for every goal scored by England during Euro 2012. A social media campaign is also under way, in which customers can win £5,000 for uploading their goal celebrations online.

Williams says there could be a slight improvement in sales of goods ranging from TVs to sports kits, but warns: “From past events what we’ve seen is that it’s quite dependent on how England do. The further they go the better.”

He urges caution generally on the impact of the Jubilee and the other events of the summer, which he says must be seen in the wider trading and economic context.

“None of the events affects the fundamentals,” he says. “They don’t put an extra pound in consumers’ pockets, so you’ve got to approach with caution. Sensitivity to value means retailers will still have to work incredibly hard. I’m not expecting a massive change in retailing just because of the sporting events and the Jubilee.”

However, with retail and consumer mood and behaviour under such pressure, a fillip – even if brief – will be welcome. Retailers will be doing all they can to be on top form to generate sales from the Jubilee, and to sustain any improvement in the consumer mood that starts to shine through.