New report from Kelkoo reveals it’s not just football fans hoping for national squad success in South Africa – every goal scored by England after the group stages could be worth £126 million to UK retailers

Thursday 3rd June 2010: With just over one week to go until the start of the 19th FIFA World Cup, a new report from Kelkoo.co.uk, the shopping comparison website, today reveals that the tournament could provide a much needed £987 million cash injection to the UK retail industry, if England survive the second round of the competition. However, if Capello’s squad make it all the way to the final, consumer spending could rise by as much as £2.01 billion, boosting total retail sales for June and July by 4% from £50.14bn to £52.15bn.

The report, commissioned by Kelkoo.co.uk and conducted by the Centre for Retail Research, examines the likely impact of the FIFA World Cup on retail sales in the UK, and analyses the impact of consumer spending on the industry as the team progresses through the various stages of the tournament. The results are based on analysis of the impact of the 2006 World Cup, trade estimates, and past research reports.
UK retail sales are projected to rise by £987 million if England survives the second round of the competition, with a further £110 million expected to be spent in pubs, clubs and cafes. England’s participation in the quarter finals would bump up sales by an additional £332 million, and if the team reaches the final, total retail sales would increase by £692 million ? a potential £2.01 billion in incremental spend if England won the World Cup. With football fans flocking to watch the matches in public venues, a place in the final would also see pubs, clubs and cafes benefit to the tune of £305 million. Finally, betting companies are tipped to receive a boost of £1.2 billion in additional revenues.

Bruce Fair, Managing Director of Kelkoo UK, comments: “The World Cup is the largest sporting event in the world, second only to the Olympic Games. As a result of its mass appeal and viewership figures, it has natural implications for consumer spending and retail businesses. The last final was viewed by 715 million people worldwide and it is estimated that the 2006 World Cup increased UK retail sales by £1.25bn. In addition, experts argue that success in the World Cup affects more than a country’s retail and leisure sales; it can also increase the country’s rate of economic growth, have a positive impact on consumer confidence, and ultimately winning the World Cup could result in 0.7% GDP growth.”  

Top of the World Cup Shopping List

As a result of the 2008/9 recession, UK consumers have tended to be more frugal, which could moderately inhibit World Cup spending. However, in spite of economic circumstances, World Cup success could increase overall retail sales significantly – by up to a total of £987 million by the end of round two, £1.3bn by the quarter finals, £1.6bn by the semi finals, and over £2bn if England wins. Although England currently ranks third (7/1) in the betting odds, behind Spain (17/4) and Brazil (5/1)[2], it’s not just football fans hoping for national squad success in South Africa. According to the study, every goal scored by the English team after the group stages to power itself through to the final, could be worth a staggering £126.3 million to UK retailers.
The biggest single area of World Cup expenditure for consumers will be on food and drink. Shoppers will spend £250 million on drinks (including non-alcoholic ones) and £209 million on food by the end of round two, together accounting for 46.5% or £459 million of all retail spending. However, if England get through to the final this figure could rise to total £874 million. TV and audio visual equipment sales are forecast to represent the next largest area of spending, as consumers take the opportunity to upgrade to HD or 3D TV sets. Sales are predicted to account for 25% of total World Cup spending (£250 million) by the end of round two, and up to a possible 30% (£620 million) if England goes all the way to the final in Johannesburg.
By the end of the second stage, retail sales will have also risen across a range of other popular categories, including sportswear and official kits (£200 million), memorabilia and souvenirs (£50 million), and garden furniture and barbecue equipment (£28 million). If England gets to the final, spending in these sectors will jump to £360 million, £95 million, and £62 million respectively.
Total spend across each sector during the World Cup

Source: Centre for Retail Research World Cup report for Kelkoo, May 2010
Internet Spending
Online spending is also expected to perform well during the tournament, with internet sales expected to reach £116 million by the end of round two, increasing to £205 million if England makes it to the final ? equivalent to 10.2% of total World Cup retail sales. Despite the majority of World Cup retail spending expected to be generated during the competition, pre-planned spend on television upgrades and sportswear is likely to be significant online. As such, 15% of all online shopping is expected to be on TV and electrical goods totalling £93 million, while 11.9% (£43 million) will be on sportswear purchases, and 11.6% (£11 million) will be on memorabilia.

Total online spend across each sector during the World Cup

Source: Centre for Retail Research World Cup report for Kelkoo, May 2010

Bruce Fair, concludes: “The World Cup is not just a lucrative event for pubs and bars, online and high street retailers will reap the benefits as well. The event will provide a welcome boost to retailers with the UK’s passion for football prompting a rapid rise in spectator and sports-related purchases. England’s progress through the tournament is therefore likely to reinvigorate sales in the retail sector, stimulate consumer confidence and ultimately drive economic growth.”