Who makes the cash? (1 Viewer)

Roverbhoy

Senior Member
Jul 31, 2002
1,840
#1
Who makes the cash? (Bit long - but interesting)

By Tom Fordyce


If you thought Euro 2004 was just about the football, think again.

England's obsession with the national team's progress in Portugal will result in a £1bn boost to the UK economy - and you are responsible.


Every beer you buy in a boozer while watching games, every packet of crisps you scoff on the sofa and every England flag you fly from your car puts money into the economy that wouldn't be there in the average June.

The timing of the matches - kick-offs are either 1700 BST or 1945 BST - makes this the perfect tournament for retailers, according to the Centre for Economics and Business Research.

The 2002 World Cup had a negative impact on the economy. Games took place during working hours, meaning that fans took time off work, and with most kick-offs before midday, there was less being spent on alcohol.

This time around, no-one really needs to bunk off work to catch the action. And when they do watch games, they are likely to do so with a drink in hand.

"Each England game will result in £116m spending in pubs, clubs and off-licenses," says the CEBR's Richard Greenwood.

PINTS SOLD IN UK PER DAY
Normal day: 18 million
During Euro 2004: 25 million

Greenwood predicts that an extra £435m will be spent in shops during May and June on Euro 2004-related merchandise like clothing and televisions.

Factor in the current spell of hot weather, and that figure could be dwarfed, according to Lawrence Peterman, investment director at Eden Group stockbrokers.

"If it rained solidly between now and the middle of July, the retailers would have a really tough time," says Peterman.

DID YOU KNOW?
For every degree increase in the temperature over 20 degrees, beer sales from off-licenses grow by 3%
That equates to an extra 400,000 cans of beer for every degree

"But the combination of football and good weather will be particularly good for retailers involved in drinks, either from supermarkets or off-licenses, and the home delivery food business,"

"The biggest beneficiaries will be the pubs, because of the kick-off times. It's perfect pub-time."

According to the British Beer and Pub Association,


35,000 of Britain's 60,000 pubs are expected to show matches live on television
up to seven million extra pints of beer could be sold per day during the competition
12 million extra pints were sold in the UK when England played Denmark in the last World Cup, the game with the best combination of kick-off time and day (1230 GMT on a Saturday).

That helped push turnover in the pub industry to more than £100m a day.

The heat is on

Simon Mowbray of The Grocer, the trade publication for the food and drink retail industry, expects a summer bonanza.

"There will be a lot of drinks company executives praying for England to reach the final in the middle of a heatwave," he says.


Could this man boost the mortgage industry?

"You can't really overstate how important Euro 2004 is to the trade. The effect on supermarkets' business is on par with Christmas."

Most companies have their own strategy to maximise their tournament profits.

While Sainsbury's are the Football Association's official England supermarket, for example, Asda have signed up Michael Owen to front their campaign.

At the top, you have five brands - Nationwide, Umbro, McDonald's, Carlsberg and Pepsi - contracted to the FA as "England partners".

Beneath that is a second tier of "official suppliers", including such non-football brands as British Airways (official England airline), DHL (official carrier) and Giorgio Armani (official tailor).

For these companies, the precise financial effect of Euro 2004 might be harder to measure - but it is significant, according to Paul Hibbs of Nationwide.

"We don't work it out in terms of product sales," he says. "It's more about promoting the image of the brand.

"There is nothing like a successful England team to attract a big audience. It isn't just die-hard football fans - the whole country comes to life during a big tournament."

The notion of an England win in the final selling mortgages might be a strange one. But even an early exit at the group stage will boost pizza sales.

"Generally in summer, the home delivery market notoriously softens," says Bernadette Eddisford, of Domino's Pizza.

"A big sporting tournament is fantastic for us, as long as the games aren't starting at 3am.

"There is a massive surge of orders up to kick-off, and then it goes silent until half-time, when there is another surge.

"When England played Tunisia at the 1998 World Cup, orders to our stores went up 100% compared to the same day the year before."


Of course, the picture varies across the UK. Don't expect England merchandise to fly out of stores in Scotland and Wales.

£12m will be lost to the British economy as an estimated 60,000 England fans travel to Portugal and spend £42m there, rather than at home.

If England crash out early, some businesses will suffer. And even those who do well could find themselves suffering in July.

"It's a greater risk for the non-food retailers," says Peterman. "A lot of retailers could be left with spare product if England flop.

"It is also a short-term boost. Sales might slump the following month as a result.

"The stock market too will ignore it. You won't get people buying Tesco's or Sainsbury's or Next shares, because the upsurge is small compared to the size of the company."
 

Elnur_E65

Senior Member
Feb 21, 2004
10,848
#8
And I am sure bars are taxed heavier than media because of alcohol's inelastic demand.

So there's much more money going to the gov-t during such competitions.
 

Slagathor

Bedpan racing champion
Jul 25, 2001
22,708
#9
ABN AMRO produced a report today stating that, when the economies of all participating nations are looked at and judged as to which economy could best use a huge input, Holland should become champions.

Of course its a coincidence ABN AMRO is a Dutch bank :howler:
 
Jan 7, 2004
29,704
#12
actually when you think about it this does make sense. and makes you think wether the economy had some influence on which player is gonna play. like for example Di Viao instead of Gilardino
 

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