Brexit has sadly triumphed over the summer of sport, at least in terms of analysing how our spending patterns are being impacted.
Ordinarily, we would have been speculating as to how the hat-trick of Euro 2016, Wimbledon and the Rio Olympics would be sparking a retail frenzy, but less prosaic issues such as the EU referendum vote have somewhat hogged the headlines.
Be that as it may, the summer of sport is still happening, with two down and one to go, as the Olympics swings into action.
This sporting bonanza is almost universally interpreted as a much-needed shot in the arm for the beleaguered UK retail sector, certainly by some in the media.
The notion is that these events give rise to a ‘feel-good factor’ that prompts consumers to go on a shopping rampage.
“The notion is that these events give rise to a ‘feel-good factor’ that prompts consumers to go on a shopping rampage”
Stephen Springham, Knight Frank
Sadly, this is more fantasy than reality and there is no evidence to support the fact that sporting events achieve incremental growth in retail sales.
In simple terms, the money that is spent would have been spent anyway.
If there is indeed any feel-good factor, this is much more likely to be expended in the pub than in a shopping centre.
Take the ONS figures for June. Retail sales volumes and values were up 3.9% and 1.4% respectively, excluding fuel.
Respectable figures maybe, but below the average of the previous six months – and demonstrating very little, if any, evidence of an uplift on the back of Euro 2016.
Of course, detractors could point to the early exit of the England team and the absence of any sustainable feel-good factor outside of Wales.
But even taking a much longer-term view, it is difficult to establish any correlation, positive or otherwise, between sporting events and retail sales.
Having done the analysis, over the past 13 major football tournaments – accounting for European Championships and World Cups – there has only been an uptick in retail sales values on four occasions.
On two other occasions (in 1990 and 2010), retail sales growth over the tournament was merely on a par with that year as a whole.
“Folklore has it that London 2012 was a massive success for UK retail. In reality, it was anything but”
Stephen Springham, Knight Frank
On the other seven occasions, retail sales were actually lower. Expressed another way, UK retail sales actually dipped in more tournaments than they grew.
Take the London Olympics in 2012 by way of better example. A sporting extravaganza on home soil, with the added benefit of a huge tourist influx.
Folklore has it that London 2012 was a massive success for UK retail. In reality, it was anything but.
Having been positive all year, like-for-like retail sales witnessed a nasty 0.4% dip in August 2012 and stayed in the doldrums for the subsequent three months.
The prospect of Rio 2016 reversing this trend appears remote.
Sporting events having a major impact on retail spending sadly remains little more than a media myth.
The fact is that retail is either reported as being boom or bust, when the reality is that it is always somewhere in between these two extremes.
UK retail isn’t riding on the crest of a summer of sport wave. Conversely, it is equally unlikely to succumb to a post-Brexit collapse.
If there is anything to learn from past experience, it is that the UK retail market is more resilient than it is often given credit for.
- Stephen Springham is head of retail research at Knight Frank