Retailers pray for African gold rush

Nick Clark
Friday 11 September 2009 00:00 BST
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As Wayne Rooney slotted home England's fifth goal on Wednesday night, it wasn't just the fans jumping for joy. Britain's beleaguered retail sector, smashed in the downturn by a slump in consumer demand, hopes that England's presence in South Africa next year will spell a huge windfall.

With interest rates and mortgages expected to remain low and the usual euphoria around England's participation on football's biggest stage, analysts predict it will be a consumer-friendly tournament. Jonathan Pritchard, analyst at Oriel Securities, said: "It helps that the tournament takes place in a similar time zone, and with all that pent-up frustration of not qualifying for the European Championships in 2008, certain sales will soar."

The obvious winners will be the replica kit sellers. While JJB Sports and Sports Direct International's pleasure from Wednesday may be tempered after becoming subject of a fraud investigation yesterday, they are expected to make a killing from the World Cup. Oriel predicted that profits at Mike Ashley's Sports Direct would soar by more than £25m. "It's not just the kits. It's the face paint, the flags, the mugs and the backpacks as everyone gets hugely carried away," Mr Pritchard said. He added chains including Tesco and Asda would look to muscle in on the market.

Stores selling food and alcohol will also see a lift in sales. Mr Pritchard said: "People will be stoking up the barbecues, buy in big crates of beer, and then nip in to watch the football on their big screens."

Pubs, which have struggled in the downturn, are also preparing to win big. Erika Hardy, from Leicestershire pub group Everards, said: "With the home nation in fine form the World Cup finals really will be something to look forward to next summer."

Four years ago, television companies did well out of the World Cup and, with many of the games available in high definition, HD-ready TV sets will once more be in demand to watch Gerrard, Lampard and Terry in all their glory.

Big sports tournaments are strong time for advertising agencies, another sector battered by the recession. Adam Smith, futures director of Group M, WPP's media investment arm, said ratings double if England make it through.

"It tends to be male-dominated advertising for products such as alcohol, cars and financials." Some predicted an upside for British Airways and Virgin who fly to South Africa.

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