World Cup – a much needed boost to the High Street?
England's footballers are striving for World Cup glory in Russia - and if they make it all the way through to the final (we can dream!) the UK economy would benefit to the tune of £2.72 billion. Warwickshire County Council's head of economy and skills David Ayton-Hill explains.
While the nation is getting behind its football heroes at the World Cup, there is much more at stake for the country than mere sporting glory - a national team's strong performance in a major tournament generates real economic benefits.
Research by Lloyd’s Bank has highlighted that there has been a significant spending boost for a number of countries that have reached the semi-finals in recent World Cups. Since 1990, consumer spending has grown by an average of 4.5% among semi-finalist countries in the year following a tournament, compared to an average of 3.3% the year before.
I wrote in Warwickshire Means Business last winter about the importance to businesses of fully exploiting opportunities when they arise, with Christmas the most obvious example. Well, a major sporting tournament, and most of all a football World Cup, presents such an opportunity and one which comes round only once every four years (all being well - England's failure to qualify for the finals in 1974 and 1994 meant the nation's businesses, as well as football fans, missed out!).
Research undertaken by VoucherCodes and the Centre for Retail Research has estimated that, during the 2018 World Cup, one in four people in the UK will spend money on drinks throughout the tournament and watch England games at their local pub.
Consumers are expected to spend £193m in high street pubs, restaurants, cafes and bars across the country throughout the tournament. If Gareth Southgate’s men reach the final, this figure could reach £488m.
Meanwhile, with 86% of fans expecting to watch the tournament at home, retailers could take £240m on food and £297m on alcohol if England surpass the group stages, with this combined figure rising to £1.12bn if the team makes it to the final.
An England appearance in the final would see World Cup fever reach such a peak that the UK economy would benefit from an overall spending boost of £2.72bn, taking into account parties, barbeques and souvenir sales.
However, an early exit for the team could also have some wider economic upsides. As the nation collectively commiserates, residents may well be tempted to undertake some retail therapy to try and cheer themselves up - a year after Brazil lost in the 1998 final to hosts France, consumer spending there rose by 9% - compared to just 4% in the previous year.
A bit of a silver lining there, then - but let's hope that England fans are taking up the party option rather than the retail therapy route!