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Page 1: Winners of the World Cup - IBISWorld · The biggest party in world football is set to begin in Brazil, the spiritual home of football. As the debate rumbles over the likely legacy

Every four years a sense of communal hope and expectation spreads as football fans of all ages and backgrounds come together to support their national team or simply experience the festival of football. This feel-good factor combined with receding economic worries should ensure a big World Cup win for UK industries that are on the ball.

While the bookies have Brazil as favourites to win the World Cup, IBISWorld expects pubs, supermarkets, TV advertising, takeaways and betting companies could also be big winners. Long odds should be offered on it being a good summer for the entertainment industries vying for attention, particularly cinemas.

However, the overall expected gains are likely to far outweigh the penalties paid by these industries. In total, IBISWorld estimates that these UK industries are set to receive a net boost of £1.4 billion. The majority of businesses that are set to gain from this summer’s World Cup will be hoping for the England team to have a lengthy stay in Brazil to prolong the economic feel-good factor. While IBISWorld shares in these feelings,

these estimates are based on England bowing out in the second round. Let’s hope England can prove us wrong.

SupermarketsSupermarkets will be a key beneficiary of World Cup fever. While millions of fans are expected to flock to pubs to watch the game, many more will prefer the comfort of their own couch, with their fridge at hand.

Supermarkets are expected to go shoulder to shoulder in a price war over products like beer, pizzas and barbeque equipment. During previous World Cups, competition over beer prices has been intense, with prices even falling to below cost price (less than 50p a pint) for some brands during the last World Cup. This time around it will not be quite as extreme, with the government introducing a ban that prohibits the sale of alcohol at below cost price.

Nevertheless, cheap beer is a certainty. It is not just alcohol sales that are likely to rocket – sales of pizzas, ready meals and crisps are expected to go through the roof as football fans prioritise football viewing over cooking.

www.ibisworld.co.uk | 020 7222 9898 | [email protected]

New regulation is unlikely to prevent supermarkets from winning sales during the World Cup

Special ReportJune 2014

The biggest party in world football is set to begin in Brazil, the spiritual home of football. As the debate rumbles over the likely legacy for the host country, IBISWorld looks at the expected impact back where the game began and anticipates a boost of £1.4 billion for certain industries

Winners of the World Cup:UK industries hopeful for a big home win

Page 2: Winners of the World Cup - IBISWorld · The biggest party in world football is set to begin in Brazil, the spiritual home of football. As the debate rumbles over the likely legacy

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UK Industry Performance in the World Cup

Supermarkets have also been looking to push the sales of some of their more expensive items. TVs have been heavily discounted as they try to tempt fans into splashing out on a new big-screen telly, while barbeque sales are also being pushed for those hosting World Cup parties as the weather heats up. Overall, IBISWorld estimates that the supermarket industry will receive a £515 million sales boost from this summer’s festival of football.

Pubs and barsPubs and bars are also expected to score courtesy of the World Cup. This comes at a fortuitous time for the industry, which has been suffering from falling beer consumption and rising supermarket competition for years, resulting in an average of more than 20 pubs closing every week.

Due to the favourable time zone, all 64 games should be shown during peak entertainment hours, between 5.00pm and 1.00am. With three games to be shown a day on average during the group stages, pubs could enjoy some big nights.

In further good news for the industry, the government overturned its original decision not to relax licensing hours for England’s games beyond the usual 11.00pm close time. As a result, 4.5 million people are expected to flock to some 45,000 pubs and other licensed venues to watch England’s first game against Italy at 11.00pm on 14 June, ensuring one of the biggest nights of the year for pubs. Pubs can also apply for a £34 temporary event notice to stay open for late games not featuring England. Pubs are expected to get in the mood by offering World Cup themed food and drink options, or sampling samba beats.

Overall, IBISWorld estimates an extra 143 million pints will be consumed at pubs and other licensed venues across the tournament, contributing to an industry boost of £455 million.

Takeaways and fast foodTakeaway restaurants should be another big winner from the World Cup as people order in a pizza or curry while watching the

tournament. IBISWorld estimates the World Cup will drive sales of £205 million.

The scheduling of games during and after dinner time should prove crucial, as many viewers are drawn to the convenience of fast food over cooking. England’s games will prove the busiest time for takeaway orders with up to 19 million viewers expected to tune in for the first game. However, sales should prove strong throughout the tournament due to the lack of competition from other sports or programming. Pizza delivery operators should be the major beneficiaries of this.

During previous football tournaments, takeaway pizza sales increased by about 40% during England’s matches. The UK’s biggest pizza chain, Domino’s, recently advertised for 1,300 new employees to cope with the expected surge in demand, announcing they expect to sell 6 million pizzas during the tournament. For the first time, the majority of pizzas are expected to be ordered via smartphone apps.

Beyond pizza, the burgeoning popularity of Just Eat and similar ordering platforms will make it easier for fans to order in curries, Chinese and other takeaways from independent operators, ensuring the benefits are shared across the industry. Kebab shops, chicken shops and other purveyors of late-night snacks should receive a boost as football fans stop off en route to and from the pub.

While takeaways should thrive during the tournament, full-service restaurants are expected to take a hit as people sacrifice eating out to watch football. Foodies should not need a reservation for their favourite restaurant when England is playing.

UK industry gains in 2014 World CupIndustry World Cup revenue

Supermarkets £515 millionPubs and bars £455 millionTakeaways and fast food £205 millionGambling and betting £140 millionTV advertising £90 millionCinemas -£20 millionTotal £1.4 billion

SOURCE: IBISWORLD

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UK Industry Performance in the World Cup

Gambling and bettingThe World Cup guarantees a surge in football betting. The tournament helps to heighten interest in football and also provides 64 extra fixtures in the summer for punters to bet on, ensuring the four weeks are a cause for celebration for UK betting businesses. Football betting has grown in importance in recent years, while other sports’ betting has stumbled.

The World Cup will provide bookies with plenty of opportunities to cash in, with a surge in second-screen betting expected to amplify the boost to the industry. Technology has come a long way in four years, and mobile and in-play betting are likely to be a significant feature of this summer’s betting activity. However, the industry will be one of the main groups hoping that the England team does not bring home the trophy this summer, with vast amounts of wagers being placed on an England triumph.

The amount wagered on this World Cup is expected to reach new highs, as confident consumers increase their gambling budgets and digital platforms make betting more accessible to infrequent gamblers. However, UK bookies are likely to return a larger share to punters than during the last World Cup, as the results in 2010 were particularly favourable for bookmakers. The higher volume of online and in-play bets is also expected to contribute to a lower gambling yield for betting companies. In total, IBISWorld estimates that the Gambling and Betting industry will generate an extra £140 million during the World Cup.

TV advertisingTV advertising revenue goes through the roof during a World Cup. The tournament is viewed in staggering numbers in the United Kingdom, which leaves TV channels with an opportunity to hike prices offered to advertisers. Around 19 million people are expected to tune in to each England match, while over six million viewers should still watch non-England matches.

Of course it is only ITV that stands to

benefit from this, as the BBC do not show adverts. A 30-second slot during coverage of an England match will fetch up to a whopping £300,000, with the cheapest slots still going for £275,000. This is about twice the price of a similar slot during the X-Factor final; the company’s second-largest audience draw.

For non-England matches, this figure falls to between £40,000 and £100,000 per 30 seconds, still a considerable cost. Out of the 64 World Cup matches, ITV will broadcast 34 of them, including two of England’s three group stage matches. ITV will also broadcast the final, alongside BBC coverage, however the company is only expected to capture around 20% of the audience, given that viewers would prefer advert-free coverage. Despite this, IBISWorld estimates that ITV is set to generate around £90 million from adverts in World Cup games this summer, although an impressive showing from England could inflate this figure further.

CinemasThe UK Cinemas industry is set to be on the defensive once the World Cup kicks off. Top football games will fill every evening for the final two weeks of June. Historically, cinemas have suffered from the distractions of an abundance of sporting content and a spike in interest in football during World Cup periods.

In both 2006 and 2010, cinema admissions plummeted in June as would-be cinema goers were glued to TV sets in their homes and local pubs. Typically, customers return in July as interest in the World Cup fades. The fiesta of football in Brazil this summer is expected to grab the hearts and eyes of an even greater proportion of the population, and while the major cinema chains are expected to offer 3-D screenings of the big games, they are unlikely to recreate enough of an atmosphere to retain customers in large numbers. IBISWorld estimates that the industry will suffer a £20 million loss of revenue during June as a result of the World Cup, counting lost ticket sales and associated food and drinks sales.

Placing bets on the tournament will be simpler than ever with access to online gambling and mobile apps

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UK Industry Performance in the World Cup

Subscribe and become an industry expertSubscription packages can be tailored to meet your individual or company’s needs. Benefits of subscription include substantial discounts on report prices, exclusive data access and rates on customised research to help you move quicker than the competition. Including key statistics, analysis, historical data and future forecasts, IBISWorld Industry Reports provide the information you need to make sound business decisions – now and into the future.

For more information, please call us today on (02) 07222 9898

IBISWorld Industry reports used in this article:G47.110 SupermarketsI56.101 Full-Service RestaurantsI56.104 Takeaway & Fast Food RestaurantsI56.302 Pubs & BarsJ59.140 CinemasJ60.200 Television Programming & BroadcastingR92.000 Gambling & Betting

For more information on these, or any of the UK’s 400 industries, log on to www.ibisworld.co.uk, or follow IBISWorldUK on Twitter.