Member Article

What England’s early World Cup exit means for UK businesses

With England fans still reeling from the shock of the team being knocked out of the World Cup in the group stage for the first time since 1958, business rescue and recovery specialist Begbies Traynor has been analysing the economic impact of the country’s early exit.

It is estimated that failure to reach the quarter final will cost the UK economy £1.2bn with each England fan expected to have spent an additional £56 had the team been successful. Figures show that each England goal was worth almost £200m to the economy.

Among the worst World Cup losers are:

• Pubs and bars which account for 50% of the loss; Brits were sinking 37m pints a day during England’s short-lived stay in Brazil and this is now expected to drop to 24m. Spending on all alcohol is forecast to drop from £114m per day to £38m
• Sports clothing firms face a potential shortfall of £300m due to over stocking of football-themed items such as shirts and flags
• Fast food outlets; takeaway firm Domino’s estimate they would have delivered an extra 12m pizzas
• Bookmakers; the surge in betting activity when England qualify for the latter stages will now be quashed meaning bookies will see around a 35% drop in placed bets
• Supermarkets; economists predict they will miss out on a footballing feel-good windfall through reduced sales in food, alcohol and barbecue promotions
• TV and advertising; ITV and advertising agencies will miss out on a 5%-10% boost in advertising spend

However, on the positive side, some businesses will benefit from England’s defeat – DIY stores, garden centres, travel agents and cinemas are all likely to see an upsurge as football fans abandon their TVs in favour of other leisure activities.

“Travel agents are already seeing a boost in bookings as football supporters opt to book early holidays in the face of their team’s defeat, but many other businesses will lose their share of the £1.2bn that progression to the quarter finals was set to earn the UK economy,” comments Andy Haslam, partner at Begbies Traynor in the North East.

“Bookmakers may be pleased that those optimists who predicted an England win have lost their stake already, but they will miss out as betting levels now fall off. Pubs, supermarkets and sportswear retailers look set to be the other big losers from England’s failure to progress as the hoped-for feel-good factor fails to materialise.”

This was posted in Bdaily's Members' News section by Andy Haslam .