Great Britain could use a World Cup victory – for the economy


The World Cup usually provides a big boost to the UK economy. With any luck, the sun will shine and England will make a decent way through the tournament, encouraging people to flock to the pubs and host spectator parties at home. But even before the first kick-off this year, one of these ingredients will be missing.

The competition, which starts on Sunday, is the first of its kind in the British autumn. Previously, this happened in warmer months, which automatically boosted the feel-good factor and cash flow in the till. The calendar and controversy surrounding the Qatar games explain why the 2022 event may be a more muted affair for retail and hospitality companies.

With the shorter days and colder temperatures, fans will mostly have to watch matches indoors. That will limit the number of people pubs can serve, analysts at Shore Capital note. Even many of the viewers at home will likely have fewer guests than in the summer when they can use their balconies and backyards.

Some pubs may be able to reuse the Covid-era facilities they’ve invested in so people can drink and eat al fresco. This will benefit the strongest operators, such as Young & Co.’s Brewery Plc, which has 100 pubs with tents and outdoor heaters, and Fuller Smith & Turner Plc, where 70% of the property has usable outdoor space for games shows. Plus, they don’t have to deal with social distancing.

The tournament is also taking place amid the cost of living crisis, which may also take some of the exuberance away.

Consequently, research by GlobalData for VoucherCodes estimates that retail spending will be 19% lower than the 2018 World Cup and 41% lower than the 2021 UEFA European Football Championship. Hospitality spending will be 10% below 2018 and less than half of 2021 lie.

Electronics retailer Currys Plc has a slew of promotions to boost TV sales, but the economic backdrop could reduce demand for expensive sets. England v USA on 25th November at 7pm while falling more promisingly for pubs it also falls on Black Friday so it’s not clear what impact this will have on what is normally a big online shopping day. Many retailers have brought forward their Black Friday promotions.

However, the World Cup offers the possibility of some additional sales for supermarkets and hospitality companies.

Besides the weather, England’s performance is the other big determinant of how much people will spend. The 2018 World Cup was blessed with both ingredients: not only did it coincide with a heatwave, but England made it to the semi-finals. And the UEFA Women’s Euro 2022 win came in the midst of a long, hot summer. Even with more seasonal temperatures the year before, England’s reaching the final of the Euro boosted sales. So far this fall has been warm, which could lift spirits.

If the stars are right and England or Wales – neither Scotland nor Northern Ireland qualify – progress, matches could be combined with festive gatherings to boost trade.

Supermarkets could see a strong run from Halloween to the Christmas holidays. While football fans may be buying less-fresh groceries like grilled meats and higher-margin salads, they will stock up on other snacks like pizzas, party food and dine-in offerings. And alcohol is a perennial favorite.

Pubs could look forward to a boost in sales from the end of November. This normally quiet period can see busier business, particularly on Mondays and Tuesdays when some of England and Wales’ early games are taking place. That could well tie into the Christmas business, which is already set to be bolstered by a return of office parties. Youngs estimates bookings for the England and Wales group stage games could generate around £400,000 ($474,360) in revenue. Spontaneous visits should further increase sales.

Of course there will be other challenges. The finals will take place on Sunday 18th December, so the final stages of the tournament could conflict with Christmas dinner reservations. Restaurants and pubs may have to struggle to please both fans and families alike. Meanwhile, grocers would have to endure the twin demands of Christmas trade and football, in what Ken Murphy, chief executive officer of Tesco Plc, has described as “a bit of a curveball”.

England’s performance and British weather have something else in common: there’s always room for disappointment. But with the full force of the cost-of-living crisis yet to be unleashed, retailers and food service establishments will cling to every comfort crumb.

More from the Bloomberg Opinion:

• Burberry on the way to luxury powerhouse status: Andrea Felsted

• The UK housing market becomes desperate again: Merryn Somerset Webb

• British families are already being plagued by camouflage taxes: Stuart Trow

This column does not necessarily represent the opinion of the editors or of Bloomberg LP and its owners.

Andrea Felsted is a columnist for Bloomberg Opinion covering consumer goods and retail. She was previously a reporter for the Financial Times.

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