World Cup leaves industry with little to celebrate

02 August 2010 by
World Cup leaves industry with little to celebrate

Pubs, bars and restaurants were hoping the World Cup would give them a boost in sales, but many suffered as people stayed at home to watch the games. Daniel Thomas reports.
The 2010 World Cup will be remembered for many things: vuvuzelas, cheating Uruguayans and violent Dutchmen as well as the woeful performance of Fabio Capello's charges.

For the UK hospitality industry, meanwhile, the month-long tournament proved to be a mixed blessing for many.

Prior to the tournament, the British Beer & Pub Association (BBPA) predicted that the group stage would bring in at least an extra £80m for pubs, with 11.5 million people expected to follow England's fortunes in the first three games in the pub.

Professional services firm PricewaterhouseCoopers (PwC) was more cautious, suggesting that supermarkets and take-away outlets would benefit more, with an estimated 80% of adults expected to watch the matches at home.

David Chubb, partner at PwC, warned that while the tournament should offer pubs a boost, "the trade cannot build a recovery just off the back of the World Cup".

Trading figures for the period covering the World Cup suggest that PwC's prediction may have been closer to the mark.

The monthly Coffer Peach Business Tracker, which monitors performance across 16 leading pub and restaurant operators including Mitchells & Butlers, Whitbread, Pizza Hut, Punch Taverns, Gondola and Tragus, revealed that combined like-for-like sales were up +1.4% on June last year.

But this was largely down to the school half-term break falling in June this year (it was in May last year), rather than the World Cup, according to Peter Martin, founder of Peach Factory.

"Both pubs and restaurants benefited from extra trade during that first school holiday week but the subsequent effect of the World Cup later in the month and the continuing sunny weather had a more mixed impact," he said. "While pubs in general saw an upside, restaurants generally suffered sales drops. Big sporting events and the weather, as ever, are a mixed blessing."

Food-led pubs and casual-dining operators in particular struggled during the World Cup, with punters favouring drink-led outlets to watch the games. M&B, which runs All Bar One, O'Neills and Harvester, suffered a drop in overall like-for-like sales of 2% over the course of the competition.

Adam Fowle, M&B chief executive, said: "The main reason to come to an M&B pub is to eat, particularly on a Friday or Saturday night or a Sunday. When matches fell on those days it affected the numbers coming in. We didn't pick up enough drinkers - you have supermarkets selling 18 pints of lager for £10 and we cannot do that."

Clapham House Group, owner of Gourmet Burger Kitchen and Real Greek, said the World Cup "had a negative impact on sales in June," without giving a like-for-like sales figure for the period.

Paul Campbell, chief executive, said: "The fact that it was pretty hot weather didn't help. People were at home watching the game, having barbecues. But we were not expecting June to be a great month and it was not a great month."

Struggling nightclub operator Luminar also warned that the World Cup kept punters out of its venues. Same outlet sales across its 76 clubs were down 19.9% in the 19 weeks to 8 July, with admissions revenue down 26%. Luminar said the World Cup knocked an additional 6% off its sales.

Greene King said that England's poor performance in the World Cup contributed to its pubs enjoying less of a boost in sales than seen during earlier tournaments.

"The World Cup has not really helped us as much as we saw in earlier (tournaments)," said chief executive Rooney Anand. "There wasn't the feel-good factor around this World Cup. As soon as the [England] matches finished, people went home".

While most operators were most concerned with how England were faring, tapas chain La Tasca moved to capitalise on the success of Spain by offering free meals to diners on the night of the final in the event of the country winning the World Cup.

The operator gave away more than 7,500 dishes following Andres Iniesta's winning goal in extra time against Holland. Joanne Cox, brand manager at La Tasca, revealed that in parts of the country, the company's sites reported trade increases of 70%, 80% and 110%.

It seems that aligning yourself with a team that can actually play football is the way to go.


THE GOLDEN DECADE

Hospitality operators are hoping to reap the benefit of the UK hosting a number of blue chip sporting events in the coming 10 years - what has been dubbed the "golden decade of sport":

• 2010 Ryder Cup, Celtic Manor
• 2011 Champions League final, Wembley
• 2013 Rugby League World Cup
• 2014 Ryder Cup, Gleneagles; Commonwealth Games, Glasgow
• 2015 Rugby World Cup
• 2019 Cricket World Cup

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