It is billed a business bonanza. Over the next few weeks, England football fans will splash out with wild abandon, buying everything from replica shirts to World Cup-themed pizzas and cases of beer as they follow their team's progress in South Africa. The tournament is traditionally seen as providing a massive boost to UK Plc – but for retailers, publicans and even gambling companies, is the game anything more than zero sum?
The retail sector could certainly do with a lift, with consumer spending at its lowest ebb since the depths of the recession. The Confederation of British Industry's most recent Distributive Trades Survey found that 18 per cent of retailers reported falling sales in May. But some analysts doubt whether sales will really rain in with the goals as the World Cup build-up reaches fever pitch. Neil Saunders, consulting director at Verdict Research, said: "Generally the World Cup is beneficial, but not hugely so. It is a nice fillip over a short time but not the game-changer people think. Often the boost in certain parts of the industry comes at the expense of others."
When Verdict carried out a survey during the last World Cup, almost 10 per cent of people questioned said they were planning to buy a new television set, while 4.5 per cent said they would buy a new sofa. DSG International, the owner of Currys and PC World, is certainly hoping for a footballing boost. The group's finance director, Nicholas Cadbury, said recently: "What a World Cup will typically give us is a Christmas-style peak, just in TVs."
Paul Molyneux, who runs the UK arm of the Japanese electronics giant Sharp, said it had not yet seen a significant increase in customers upgrading televisions just for the tournament "but we expect it to pick up in the next few weeks". For TV sales, however, he said it really was a zero-sum game, adding: "The World Cup tends to bring demand forward. If you look over the 12 months, the tournament doesn't actually grow the market as a whole."
That hasn't stopped Freeview, the free-to-air digital TV platform, from heavily promoting its high-definition set-top box in the hope that the World Cup will boost demand.
The football could also prompt viewers to upgrade to higher quality LED screens, but there is a big downside for Britain's retailers, too. "Footfall on the high street goes down and will suffer from several of the matches being on Saturdays," said Mr Saunders, recalling that average footfall fell 23 per cent during England's first World Cup game in 2006. He predicted that DIY would be hit particularly badly, saying: "The purchasing profile is overwhelmingly men, which happens to be the same demographic as those who watch football."
Sales of men's clothing could drop but may be balanced by an uplift from women going shopping to avoid the tournament. However, the big winners will be the supermarkets, said Mr Saunders. "They will put the biggest promotional drive behind the tournament, often taking a hit on margins to shift more volume," he explained.
M&S has signed up to make the England team's official suits. Tesco. the team's official supermarket, expects to sell 800,000 England flags. If England win, Sainsbury's will refund customers who bought one of its Toshiba TV sets.
The British Retail Consortium (BRC) said that the last World Cup, held in Germany in 2006, generated about £1.25bn in extra spending across the retail sector, although that compared with total spending, of £286bn, so the sum was not really a game-changer.
Sportswear shops are likely to be among the winners, according to the BRC. JJB Sports and Sports Direct have stocked up in anticipation of strong interest in replica shirts, flags and other memorabilia. During the 2006 tournament, JJB's sales rose over £35m. "The World Cup generates interest in sportswear, obviously," Mr Saunders says. "Although they will do much better the further England gets. The better the team does the more people want to show their support."
And what of pubs? Mark Hastings, director of communications for the British Beer and Pub Association (BBPA), is confident his members will benefit enormously. The BBPA estimates that 3 million people watched football in pubs during the regular season and up to 15 million are expected to watch England's World Cup exploits. The revenue boost from England's group games alone could be over £30m. "That is not counting the other games, and if England progress it will be even higher," said Mr Hastings.
He dismissed fears that punters will turn out only to watch England, saying: "Pubs have become much smarter about targeting customers and England aren't the only draw".
This change in attitude emerged at the 2002 World Cup in Japan and South Korea, when time differences forced publicans to innovate. "We launched a legal challenge to get pubs open early, which got them thinking about a whole new experience. Suddenly it was about providing breakfast and coffee. They had to be more proactive," said Mr Hastings.
Of course, some pubs could gain from a counter-intuitive ploy – by making a virtue of not screening the football.
Elsewhere in the leisure sector though, the news may not be as good. Alternative entertainment venues such as bowling alleys and cinemas are likely to suffer falling in attendances, although some hope to attract customers by screening World Cup matches.
Sales of recorded music and DVD are also likely to fall. During Germany 2006, the then boss of HMV, Alan Giles, blamed disappointing summer sales on the World Cup, saying the "key customers in the age 15 to 35 male demographic have been rather distracted".
One might expect the gambling industry to be a surefire winner from the tournament as football-crazy punters bet with abandon. But here again, the picture is rather mixed. On Friday, the online gaming group 888 that warned weak trading would be further eroded by the World Cup. Summer is generally tough for companies that specialise in online poker and casinos because punters tend to shun their laptops in favour of soaking up the sun. And while many will this year be watching matches indoors, their gambling spend will go on football, so those without significant sports books are set to find life tough.
Not so the more traditional bookies, with big brand names and advertising clout. Graham Sharp, a spokesman for William Hill, said the World Cup could see turnover across the betting industry rising by up to £1bn, with thousands of new online accounts opened.
"This is only really the fourth World Cup where you have had the internet and the first one was very small," he said. "Really, this is the first mature internet World Cup and we expect many novice punters to place a bet for the first time – the sort of people who might have been 16 or 17 during the last tournament, for example."
Horse-racing may find the going tough in June and July, with a traditional drop-off in attendances, even at some of the bigger meetings. Income from the levy on bookmakers' horse-racing profits (which funds prize money, among other things) can also be expected to fall. Racecourse owners are, of course, trying to mitigate the impact. Arena Leisure, whose tracks include Doncaster, Lingfield and Wolverhampton, said: "We anticipate that any impact from the World Cup on trading will only be moderate. None of the major England – or other key country matches – clash with any [of our] key fixtures.
"Where football does coincide with any of our racing fixtures, we will be showing the match on big screens at our racecourses before, during and after the racing so those of our customers who want to participate in the World Cup spirit can do so."
That technique is being adopted at Goodwood. On 18 June, the regal West Sussex racetrack will host a "Fireworks and Football" evening on the night England play Algeria, with big screens showing football after the racing. There may, of course, be a sting in the tail for bookies and one or two others who have linked World Cup offers to England winning – it could prove very expensive. Mr Sharpe said: "Increase in turnover does not necessarily mean profits for us. That all depends on results."
The investment banks making sense of the form book
It's a hard life being a research analyst for an investment bank: you start work at the crack of dawn and then spend all day glued to a screen trying to pick winners from a dizzying array of stocks, bonds and other financial instruments that, frankly, no one really understands. And then they expect you to go out and find the winner of the World Cup.
Yes, just to prove they are occasionally allowed to have a bit of fun, the big banks have been falling over themselves to offer up their predictions for the winner of the World Cup. But, bankers being bankers, they haven't done it by considering the relevant merits of Kaka, Lionel Messi, Cristiano Ronaldo, Fernando Torres or even Wayne Rooney. No, in true banker style, they've applied sophisticated algorithms, quantitative sampling techniques and other mathematical wizardry to predict the winner.
And their conclusions? Well, all that blood, sweat and tears has produced the startlingly unoriginal conclusion that the winners will, of course, be Brazil. Danske and Evolution were the most recent analysts to step up and take the spot-kick, as it were, with both of them picking the boys in canary yellow.
Danske has the economic Pigs (represented in the tournament by Spain, Portugal and Italy) beating up on each other before the latter are knocked out by Germany. Danske expects England's traditional nemesis to fall to Brazil in the final because, it says, "as in real life, the emerging market nation will beat the developed nation".
Evolution came up with the same winner (via a different method), as did UBS, which reckons that Italy, Spain and Brazil are the three teams with the best chances, with the latter top of the tree.
Goldman Sachs, of course, has not picked a winner but has simply gone for four semi-finalists: England, Argentina, Brazil and Spain. That's hardly surprising, given how fond Goldman is of being on the winning side whatever the outcome.
JPMorgan proved to be the outlier. Its number-crunchers used the sort of quantitative mathematical models usually employed to pick stocks to reveal that the winners will be... drum roll, please.... England, whom they think will beat Spain in the final. The Netherlands are forecast to come in third.
What this says about JPMorgan's stock-picking model really rather depends on which part of the UK you come from and whether you are an optimist, or a realist.