Televisions, beer and replica shirts among target goods, with supermarkets and electrical shops expected as biggest winners
Booming sales of televisions, beer and replica football shirts are set to kick off a bonanza for retailers as the UK prepares for the pain, and potential joy, of this year’s World Cup.
With nearly two-thirds of the country preparing to watch at least some games in football’s biggest tournament, which gets underway on 12 June,supermarkets and electrical shops are expected to be the biggest winners. Of the £814m Brits are expected to spend before and during the games in Brazil, £359m is likely to be splashed on new TVs, radios and speakers, while £271m will be spent on snacks and drinks, according to analysts at Conlumino.
“Supermarkets take the opportunity to run promotions on food and drink and it adds a bit on top of the normal summer boost from barbecues, although it does depend on the weather,” said Matt Piner, research director at Conlumino.
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Sainsbury’s says it expects sales of beer and cider to be more than double those during a normal week while fans will snap up more than 280,000 England flags in its stores and more than 30,000 World Cup footballs.
Tesco, meanwhile, thinks it will sell twice as much beer as normal while barbecue foods and snacks such as crisps and nuts will be up 25%. Tesco beer category spokeswoman, Natasha Pitman, said: “The World Cup is the biggest sporting event on the planet and will create a month-long carnival-like atmosphere for millions of football fans at home.”
A good run for England could be a fillip for major supermarkets, who have been struggling to cope with the rising popularity of discounters such as Aldi and Lidl as shoppers generally tighten their belts.
Dave McCarthy, a retail analyst at HSBC, said: “The better England do, the more opportunities there are for supermarkets and the World Cup may provide some short-term relief.” But he warned: “In the face of the structural issues they have got, like the rise of the discounters, it will prove insignificant.”
Supermarkets are not the only ones praying that England stay in the tournament beyond the group stage – the more games Rooney and his team-mates play the better it is for electrical stores and sports shops.
John Kempner, the television buyer for John Lewis, which saw a 47% year-on-year rise in sales of flatscreen TVs in the last week of May, says more fans will buy a new set if England make it to the semi-finals or the finals. While some analysts say a World Cup merely encourages people to buy their TVs earlier – so sales for the year will be flat – Kempner says the competition is generally worth an extra 5% to 10% in TV sales to John Lewis as people trade up to larger and more hi-tech sets. But he adds: “In previous years we’ve seen the sales increase stop when England fall out of the competition.”
Those selling replica kit are also praying that England’s boys have a good run. Peter Cowgill, chairman of sports fashion retailer JD Sports, said: “If the team do well there’s a feelgood factor and that drives footfall into stores. A good performance from England brings about general social interaction so that people want to buy shirts and trainers.”
Many shoppers complain of the high price of football shirts that replicate the kit worn by their country’s top 11, and data from Kantar Worldpanel indicates that prices do tend to rise in a World Cup year. In 2010, for example, the number of shirts sold rose 70%, but the total value of shirts sold soared 86% to £42.2m as prices were increased year-on-year.
Despite that, Cowgill insists that profits margins on the shirts for retailers were low. Another sports retail industry insider agreed. He added: “Yes, there’s a benefit to profits when the tournament is going on but afterwards sales go the other way.”
Bookmakers can expect to collect a record £800m during the World Cup as British punters increasingly place bets via their smartphones and tablet computers. Total stakes made online are expected to reach up to £600m according to research by Regulus Partners, up as much as 60% on the last World Cup in South Africa. However, bookies are likely to suffer in the unlikely event that England lift the trophy or if the tournament hosts, Brazil, secure a much-longed-for win at home. With Brazil shirts selling second best to England shirts in the UK, the home team are clearly seen as a second favourite by Brits.
Date: June 8, 2014