The effect of the first FIFA World Cup in the festive peak season for consumer-facing sectors is a big unknown but veteran sector analyst Clive Black at Shore Capital expects an overall boost for grocery and hospitality industries, but a more subdued Christmas for non-food chains.
As well as other issues around Qatar hosting the World Cup, moving the tournament to the winter months for the first time means the weather is unlikely to see the full beer gardens that would normally be the case, said Black.
However, should England go deep in the competition, it can be “expected to generate good footfall” outside of the Christmas norm.
Therefore, pub chains such Fuller Smith & Turner PLC (AIM:FSTA) should benefit and possibly JD Wetherspoon PLC (LSE:JDW), which years ago rescinded its ban on TVs in its pubs when there is a World Cup on.
The dull weather could also aid grocers such as Tesco PLC (LSE:TSCO), J Sainsbury PLC (LSE:SBRY), Aldi and Lidl, Black said.
Games, he said, would be watched at home in “nuclear units or in more extended gatherings,” which could see more spending on party snacks and on-the-shelf alcohol.
Given the World Cup also coincides with the first Christmas since 2019 when extended families could spend time with each other, Black believes spending on food and drink will take priority over gift giving, particularly among adults.
As a result, non-food discretionary spending, such as clothing and electronics, may be subdued, which could hit high-street favourites such as Next PLC (LSE:NXT), JD Sports Fashion PLC (LSE:JD.), Currys PLC (LSE:CURY) and Watches of Switzerland Group PLC (LSE:WOSG).
"The domestic supermarkets are likely to harvest the greatest demand boost from the footy whilst the non-food discretionary retailers are no doubt planning for a more subdued time than normal albeit their bigger concern is probably going to be aggregate demand and operating expenses in [2023]."
Black notes that this Christmas would also see increased travel around the world compared to the Covid-restricted years, with up to 2mln people expected to leave these shores.
This should be a boost for travel hubs, such as airports and rail stations, should they be open.
A big beneficiary of this, potentially, would be WH Smith PLC (LSE:SMWH), which yesterday swung to a profit and reinstated its dividend for the first time in three years thanks easing restrictions which boosted revenue in its travel arm.