Here we go again. As the nation prepares itself for the glory and the pain of Euro 2016, supermarkets and DIY stores are readying themselves for a run on beer, crisps, pizzas and barbecues.
And there’s the rub. While our natural inclination is to expect the worst on the field (and no Sir Geoff Hurst, I don’t think England’s squad is the most exciting since the World Cup winning team of 1966), there is a glimmer of good news for the economy.
If you’ve seen the glut of booze offers and cut-price fast food on the shelves of your local shops, you’ll know what I mean. According to Lloyds Bank, the countries reaching the final four stages in the last five tournaments have tended to see rises in both consumer spending and GDP growth. This year, Wales and Northern Ireland, who have never before qualified for the tournament, may also benefit from this feel-good factor
England, ranked second in Europe in terms of GDP, has never reached the final of the Euros (and don’t we know it). Nevertheless, despite a lack of success on the pitch, since 1996, England has seen an average increase in consumer spending growth between Quarter 2 and Quarter 3, from 0.26 per cent to 0.41 per cent, in championship years. The biggest boost to spending came in 1996 when England reached the final four as host nation (I remember hiding behind the sofa when England played Germany and lost). Consumer spending growth rose from 0.32 per cent before the tournament to 1.28 per cent afterwards. In contrast, spending slumped between Q2 and Q3 in 2008, the year of the financial crisis, when England failed to qualify for the tournament.
Nitesh Patel, economist at Lloyds Bank, said: ‘Successful Euro campaigns have tended to have a positive short-term impact on the mood of consumers in those nations. While many other factors will be at play driving consumer spending and GDP growth, the research shows that there are generally rises in spending growth during the period of the event that tend to drop off later on in the year, once the euphoria wears off. This suggests that part of the consumer spending and GDP growth during this period may be due to the ‘feel-good’ factor associated with sporting success. Wales and Northern Ireland, who have qualified for the event for the first time, may well experience a greater benefit than England.’
With three days to go before the start of the tournament, the boost to the economy is already in evidence. Domino’s Pizza announced today that it is creating 10,000 new jobs as part of a major recruitment drive ahead of the European Championship (and the Olympic Games). The company expects three pizzas to be ordered every second during Euro 2016. That’s a lot of ham and pineapple.
But it’s not all good news for the nation’s shops. The big sportswear retailers, most notably Sports Direct, face one of the biggest risks from the team’s failure. Greg Bromley, retail analyst at Conlumino, said: ‘Shirt sales will spike ahead of the tournament, but Sports Direct could be left with a lot of surplus stock if the home nations get knocked out early on.’
After his grilling by the Business Select Committee today, it’s the last thing that Mike Ashley needs.
Helen Nugent is Online Money Editor of The Spectator