As the kick-off for the Qatar 2022 World Cup approaches, businesses are preparing for unprecedented times - for the first time, the most globally watched sporting event will coincide with Christmas.
The timing of the four-week spectacle, coupled with a cost-of-living crisis, has created a degree of uncertainty in what is often the busiest and most profitable trading period for some sectors.
Supermarkets, pubs and restaurants have been vocal on how they expect trading to differ from years gone by, minus the two Covid impacted winters.
Analysts have been attempting to assess where consumers will spend their money, with decisions having to be made to keep budgets under control.
Insurance and energy sectors may also feel some residual impact from the World Cup.
Here’s a quick run-down of what some sectors can expect over the festive period
Supermarkets
Clive Black, retail analyst at Shore Capital said that the likes of Sainsbury, Tesco, Aldi and Lidl should score this winter.
He believes that the bleak weather, coupled with families looking to stretch their pounds would see many ditch the pubs for the couch, watching games in “nuclear units or in more extended gatherings.”
Mark Brumby, a hospitality analyst at Langton Capital adds that with “mortgages, food and heating costs through the roof” many matches will be watched from the comfort of one's home.
Good news for the supermarkets, with money that might have been spent at pubs allocated to party snacks and on-the-shelf alcohol.
Add in that this Christmas, barring any last-minute spike, will be the first Covid free one since 2019.
Black believes friends and families will therefore be eager to spend time together, both during the World Cup, which ends on 18 December, and the subsequent Christmas and New Year period.
However, that isn’t to say that the pubs will be full of tumbleweed.
Hospitality
Fuller Smith & Turner PLC (AIM:FSTA) posted results today that saw first-half revenues recover from the pandemic as it looked forward to bagging a boost from the World Cup.
The pub group hailed “strong” Christmas bookings and predicated an “additional uplift” from the World Cup.
Although beer gardens won’t be full of plastic pints launched everywhere in celebration of an England goal like the Russia 2018 World Cup, they can still “expect to generate good footfall” outside of the Christmas norm, said Black.
The next question to ask is whether the World Cup would take precedent over Christmas when the public decide where to spend their money.
The likely case is there is two very different audiences, with those more invested in the World Cup and those more invested in Christmas.
Any overlap between the two groups, Brumby believes, will not be huge.
In the small cases where there is, Brumby hints that the World Cup may be the priority given it starts this Sunday, although if England were dumped out early that would free up cash for Christmas, and likewise if they go the distance that would eat into the festive budget.
“The World Cup may take precedence with anyone vaguely interested in football with Xmas probably squashed into a shorter period or, if the money really does run out, squeezed in financial terms.”
England going deeper in the tournament means the ‘casual’ fan will take a greater interest as the hype picks up, good news for pubs looking to get people through the doors, although Brumby said it is not possible to put a monetary figure on it.
Interestingly, where pubs may face a dilemma is attempting to accommodate rowdy football fans with family and work Christmas parties.
The World Cup is likely to see drinkers flock to the pubs while driving away eaters.
Consequentially, the big players which have the size and facilities to accommodate both groups, Fuller, Youngs, Marstons, Greene King (LSE:GNK), will likely reap the biggest rewards.
Smaller, independent chains may be forced into a decision on which market they decide to cater too, although as Brumby puts it, “anything is better than nothing.”
Retail
Christmas is the season of gifting, although that may not be the case this year.
Black believes non-discretionary spending on clothing and electronics; popular Christmas gifts, is likely to be subdued.
High street favourites Next, JD Sports, Curry’s and Watches of Switzerland are preparing to feel the squeeze in that regard.
“Non-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.”
Insurance
Perhaps unsurprisingly, research by Aviva revealed that accidental damage claims where football played a part increased by 82% during the last World Cup, meaning providers such as Aviva and Direct Line can expect busy phone lines.
Electronic equipment, windows and soft furnishings regularly fell afoul of kickabouts and celebrations during matches, Aviva said.
Kelly Whittington, UK property claims director for Aviva said: “As a football fan, I completely understand the excitement and emotions that surround a big tournament – but we’d encourage people to go steady, particularly around any windows or electrical items, so they don’t find themselves scoring an own goal!”
Energy
Energy usage tends to spike during international football events according to data from the National Grid.
As a reference point, the National Grid expected electricity to spike by 2GW at the half-time interval of the England v Italy Euro 2020 final.
That’s the equivalent of around 1.1mln kettles boiling.
National Grid at the time said due to people consuming content through different channels, such as internet, satellite, and on-demand, it was unlikely we would ever see a spike as high as 1990, which peaked at 2800MW after the end of the shoot-out between Germany and England.