June 24, 2010 / 11:08 AM / 8 years ago

They think it's all over. It isn't yet

LONDON (Reuters) - Poor performances from top European teams and few high-scoring matches have dampened retailers’ hopes for a big boost to sales from the soccer World Cup, executives at the Reuters Consumer and Retail Summit said.

But while it was safe for commentator Kenneth Wolstenholme to declare: “They think it’s all over. It is now” as England scored a fourth goal in its 1966 World Cup final victory, it is too early to write off the tournament with 2-1/2 weeks still to go.

Although France has crashed out, other major teams from Europe -- the biggest audience and market for the four-yearly event -- are scraping through into the knockout stages, which typically generate the most excitement.

And amid signs that summer has finally arrived in northern Europe, retailers may yet get the hoped-for boost to sales of beer and party food, and be spared piles of unsold stock.

Perhaps more important, given a backdrop of depressed consumer confidence, is the lift that success in the world’s biggest sporting event will give to countries that progress to the later stages of the competition.

“There is a feel-good factor, and it does manifest itself in retail sales,” said Richard Hyman, strategic retail advisor to business consultants Deloitte.

For some retailers, the benefits from the World Cup, which started in South Africa on June 11, have already been reaped.

DSG International DSGI.L, Europe’s No.2 electrical goods retailer, said on Thursday it had seen a 50 percent jump in sales of televisions in the run-up to the tournament and that sales volumes were up 30 percent on the last World Cup in 2006.

In Britain, its Currys chain ran a “cash for goals” promotion which will see it return 10 pounds to shoppers who spent over 599 pounds on a television for every goal the England team scores.

As the team has only found the back of the net twice so far, DSG may not see much impact on its profit margins.

Grocer J Sainsbury (SBRY.L) also scored a coup over rivals by securing 70,000 vuvuzellas -- the plastic trumpets that are providing the soundtrack to every World Cup game -- which have now sold out.

But after an initial flurry of excitement, many executives this week said they were lowering their expectations.


“For us, it was always mainly an opportunity to do a little bit of fun marketing,” said Ian Cheshire, chief executive of Kingfisher (KGF.L), Europe’s biggest home improvements retailer, which has been selling garden gnomes dressed in the England kit, as well as gazebos and wheelbarrows decked in England colors.

    “The mood effect is the thing that everyone is looking for, and based on the past week, I‘m distinctly not counting on it.”

    Kingfisher’s major markets are France, which is out of the competition, and England, which has made the next round after some unconvincing performances against lowly-rated opposition.

    Dutch grocer Ahold AHLN.AS is more upbeat, no doubt because Holland has been one of the few European teams to win both of its opening matches.

    Chief Executive John Rishton predicted a “good boost” to second-quarter sales from the tournament, though he was skeptical how much would reach the bottom line as most of the extra demand is for goods on promotion, like beer.

    In a bid to attract soccer supporters, Ahold is distributing 31 million furry Dutch team mascots which it has called “Beesies” and says it has sold out of Beesie caps and snake puppets.

    Like a striker’s run, or a defender’s tackle, timing is everything for retailers hoping to benefit from World Cup games.

    “You don’t want them on a Saturday, because the footfall drops,” said Carl McPhail, chief executive of British fashion retailer New Look, which said it has seen particularly strong demand for bras in the pattern of England’s St George’s flag.

    So, while England supporters may be quaking at the prospect of playing old rivals Germany in a second-round match on Sunday afternoon, retailers may feel they at last have a sight of goal.

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