Sunday 16 May 2010

Economic impact of the World Cup

It seems that Mintel has been quickest off the mark with their economic impact of the World Cup. You should expect to see many more of this type of analysis coming out over the next four weeks and then possibly follow up articles depending upon how well the England team performs.

UK consumers set to provide world cup boost to economy

As June approaches and the nation anticipates a summer of football frenzy, new research from Mintel reveals it is not only the fans who are anticipating cheering a good result. Mintel’s exclusive research reveals that nearly two thirds (63%) of Brits can be expected to increase their leisure spending as a consequence of the 2010 FIFA World Cup - rising to almost four in five hardcore football fans. In addition, nearly three quarters (71%) of UK adult population are planning to watch the world cup at some level and just 28% Brits claim to have no interest in the tournament.

With in and out of home sectors looking to cash in, manufacturers and retailers are eagerly awaiting a result. Over one in five (23%) consumers say they will probably place one or more bets on the World Cup – rising to 37% of those who watch a lot of football. Amongst fans who will be going to pubs to watch games, four fifths (81%) predict an impact on spending, suggesting that they will go out and spend money over and above their usual social activities. Meanwhile, 31% say they will be buying alcohol as a result of the world cup, 29% food and snacks and 13% say they will buy a newspaper more often.

Richard Cope, Principal Trends analyst at Mintel, said:

“Despite edging back into growth at the end of 2009, the UK economy remains in need of the boost to spending that can be delivered by the World Cup, ideally underpinned by a successful tournament for the England team. Sport can be a significant driver of the ‘feel good factor’ that encourages happy consumers to spend – and the opportunity of the World Cup this summer could prove just the ticket for both retailers and the wider economy.”

Highlighting our national passion for the ‘beautiful game’, more than 70% of adults in the UK – and more than 60% of women – will watch at least some of the tournament. Interest is not dependent on home success either – only 13 % of those following the tournament will switch off if or when England are knocked out. Indeed, even those with the most casual interest in the World Cup (the 24% of Brits who don’t normally watch football, but will tune in for the world cup) are buying into the whole event experience – only 26 % of these will depart with the national team.

Mintel’s research reveals that the majority (83%) of UK adults following the World Cup will be cheering for England. Of the remainder, 5% will be following Brazil and 2% for Italy and Spain respectively. However, Mintel’s research reveals that many consumers have also have a reserve in mind when it comes to team support – with brand Brazil leading the way with 9% of consumers, followed by England and Italy with 5% each.

Meanwhile, it seems committed football fans used to showing their support for their team are planning to take that attitude into the World Cup – with 42% saying that they ‘regard myself as patriotic and am proud to show it’. Indeed, one in ten consumers (equating to 4m Brits) overall claim they are planning to buy the shirt or a flag of the team they will be supporting. However, it seems that casual followers adopt a more typically British reserve, with 46% saying they are patriotic, but don’t feel the need to show it.

The in-home sector is also set to see the benefit. Mintel's research reveals that 61% of those who plan to watch the majority of cup games in home with their family (and 56% of those planning to watch alone) say that the World Cup will have an impact on their spending over and above their normal household expenditure. In addition, a third (31%) of Brits say they will probably buy alcoholic drinks specifically for entertaining during World Cup games.

It also seems regionality – and high profile club locations – also have a part to play in patriotism and interest in world cup prospects. The highest levels of football and World Cup interest are apparent in the North West (32%) and Greater London (29%), where the greatest concentrations of professional clubs also exist. Intermediate interest then peaks in Yorkshire / Humberside (26%) and the Midlands (25%) where the next highest concentrations of clubs are found. Scotland / North (27%), South East / East Anglia (27%) and South West / Wales (22%) regions follow.

But it seems consumers are failing to get a kick out of watching games with latest 3D technology as yet. Just 5% of Brits say they would like to watch World Cup games in 3D in pubs or cinemas.

Source: Mintel

Wednesday 12 May 2010

Head of Retail at Jones Lang LaSalle gives his retail views

Guy Grainger the Head of Retail at Jones Lang LaSalle gives his overview of the current state of the UK retail market, retail property and the internet.

Topics cover:
- Retail sales and the economy
- Retailer sentiment
- Tenant demand for property
- Rental growth for retail property
- Selfridges and internet sales

Tuesday 11 May 2010

Uncertainty returns to global equity markets

Following the dramatic upturn in global equity markets yesterday, uncertainty returns as optimism about the bailout in the eurozone fades.

Tuesday 4 May 2010

Westgate Centre Oxford sold to Crown Estate and Land Securities

The Crown Estate bought the Westgate Centre in Oxford today for around £56m at a net initial yield of 6.75%.  Half of the centre was simultaneously sold to Land Securities as The Crown Estate once again looked to work with their rival on a shopping centre project.

More details about the Westgate Centre in Oxford.

The Crown Estate press release read:

"The Crown Estate has today completed the purchase of the 30,000 sq m (320,000 sq ft) Westgate shopping centre in Oxford.

The transaction sees The Crown Estate take ownership of the Westgate Centre for circa £56 million at a net initial yield of around 6.75 per cent. It forms part of our strategy to diversify our urban property portfolio and reduce our central London weighting by investing in key regional locations. In the last twelve months the strategy has seen The Crown Estate complete close to £600 million of property transactions.
We have also established a 50:50 joint venture partnership with Land Securities Group PLC at the Westgate Centre. This follows the recent partnership at Princesshay Shopping Centre, Exeter, which saw us purchase a 50 per cent stake in the scheme.
The partnership will seek to enhance the shopping experience at Westgate, the existing retail mix at the Westgate Centre and assess prospects for a commercially viable development proposal to ensure the Westgate Centre meets the needs of Oxford’s residents, shoppers and businesses alike.
James Cooksey, head of diversification and central London portfolios at The Crown Estate said: “We are excited about this major purchase and look forward to taking a long-term approach to asset management and stewardship of this important city centre scheme.
“Westgate has the potential to significantly enhance Oxford city centre’s retail landscape and our commercial expertise and investment track record will help realise that potential. We are keen to work closely in the future with key stakeholders including the City and County Councils, along with prospective retailers, in particular the John Lewis Partnership.”
John Lewis Property Director, Jeremy Collins, said: “This is positive news for the Oxford City Centre and we look forward to working closely with the partnership and the council to bring our John Lewis department store to fruition."
On behalf of the nation, we manage a highly diverse £6 billion property portfolio across the UK and its objectives, as laid down by Parliament under The Crown Estate Act 1961, include enhancing the value of the estate and the revenue it produces. In delivering against these objectives, we have committed to a strategy of diversifying our commercial property holdings away from central London by acquiring key assets in major city centre locations, including shopping centres and retail parks. The purchase of the Westgate Shopping Centre forms an important part of this strategy and follows the purchase in December 2009 of a 50 per cent stake in the 50,000 sq m (530,000 sq ft) Princesshay Shopping Centre in Exeter, our first joint venture arrangement with Land Securities Group PLC."

Monday 3 May 2010

Problems in Greece, Weakness of the Euro, Retailer Benefits

Another successful Greek rescue package has been announced today, with the German government looking like they will back this proposal.  I'm sure many will not accept that this rescue package will become a reality until the money starts following.  The eurozone has so far supported the theory that currency union without political union is very hard to sustain.

I will be watching the foreign exchange markets closely over the next few days to see whether they are convinced that the proposals will become and reality and whether they can really work...or are just postponing the inevitable, a Greek debt default.



One benefit of the problems in Greece are that retailers should start to see the benefits of a stronger pound.  In the past six months the pound has strengthened by around 8% against the euro.Retailers have been struggling throughout the downturn for a number of reasons, and one of these was the weakness of the pound pushing up the price of imports.  This has hit retailer margins as they were forced to keep prices low in order to continue to attract customers.

It should be said that some retailers have been loving the weakness of the pound, particularly those in Central London who have been enjoying roaring trade as tourists from Europe and around the world came to the capital looking for cheap goods.

In addition those companies (generally not retailers) that have benefited from exporting goods will not be thanking the rise in the pound.

Nevertheless, the pound remains weak compared to historic standards and further strengthening over the next few years should be expected.  In the short term the problems in Greece and other eurozone countries will continue to have an impact on the relative value against the euro, whilst the outcome of the General Election and if there is a hung parliament will almost certainly weaken the pound as markets fear indecision and a lack of action of the deficit.

Sunday 2 May 2010

Always adding new centre - your suggestions

You will notice that we are constantly adding new retail locations to The Retail Database. Eventually we hope to be able to open up the database for everyone to contribute.

Until this time please feel free to suggest any shopping centres, retail parks or high streets that you would like to see on the website. We have recently added Fareham Shopping Centre onto the database because it was suggested by one of our Twitter followers.

We look forward to hearing from you.

Saturday 1 May 2010

London 2012 Olympic Games, shopping and retail opportunities

It may seem like a long way away but the London Olympics Games will be with us in just over two years and it is time to start thinking about the best ways to take advantage of the many retail opportunities associated with the Olympics Games.

We will be providing regular comments over the next two years, giving advice and suggestions for retailers, independent traders and visitors looking to get the best retail experience from the Olympics in London.

The Olympic retail experience will not just be the massive Westfield development located at the heart of the Olympic complex, although it will play a big part and it certainly worth having a look at the scheme which is set to open in 2011.


Visitors will be located across London and the wider South East. Tourism throughout the UK will be boosted as people from across the globe take the opportunity to see the country, its culture and its history. Everyone should be making the most of this opportunity.

One place you will certainly be hearing more about in the run up to the Olympics will be Much Wenlock in Shropshire. Some claim this to be the birthplace of the modern Olympics.


Election debate - what wasn't said!

The final election debate was supposed to focus upon the economy, but frankly the lack of detail from all three candidates was astonishing.  We learnt very little new about their policies and I'm not sure anyone really believes that cuts won't be larger than we are being told, whoever gets into government.



This was a great opportunity to debate the merits of a Brown type Keynesian policy of continuing government spending verses the Conservative classical economics position of cutting the deficit, shrinking government and balancing the books.  Both positions have merit and should have been examined.  They were hinted at but no great detail was given.

It is easy to understand why politicians avoid announcing these tough and technical positions to the public.  George Osbourne went down the path of announcing austerity and the polls moved sharply against him.  It seems perhaps we are happier to be misled than to hear the truth.

Make no mistake, whoever gets elected next Thursday, spending will be cut sharply and taxes will rise.  Even with the economy coming out of recession, things may to many feel a lot worse.