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London Olympics Retail Research
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The Summer of Love for UK Retailers

London Olympic Games: Retail Effects

The Centre for Retail Research estimates that the net impact on retailers of the Olympics will be 561 million. Much of this impact will be felt in London, although we expect some displacement of shoppers and overseas tourists away from the capital in order to avoid Olympic congestion. This will be a gain for shops in other parts of the country (and online) rather than a total loss of retail spending.

The displacement effect is estimated to be 143 million, although some visitors will make their shopping trips in mid-August or in September.

London Olympics: Net Increase in Retail Spending
(excludes catering, restaurants and hotels)
 
millions
Souvenir spending 111
Celebrations 281
   - Food and party 86      
   - Alcohol 109      
   - TV sales 86      
Other 'shopping' 133
Net increase tourists 36
Total 561

Souvenir Spending.

Because the use of the Olympics' logo and the development of souvenirs and mascots are strictly controlled by the Olympics authorities sales of souvenirs are likely to be restricted. The design of the approved souvenirs is weak although we are still expecting 70 million of memorabilia and 41 million of Olympic-themed books, DVDs, and games to be sold. We expect 4.5 million coins, medallions and tokens to be sold (at retail, 16 million), and slightly fewer than 600,000 mugs, and crockery (including teapots) (retail value, 4 million). Overseas sales by UK retailers should be strong at around 29 million. Total sales of souvenirs and memorabilia are likely to be 70 million.

We feel that DVDs and digital media of the LOG will be successful, with sales of 22 million (1.1 million items). Sales of albums, biographies and pictures are expected to be 5 million, LOG-linked toys and games 5 million, stationery and pens 4 million and luggage and bags 5 million. Total sales of 'books, stationery and toys' are likely to be 41 million.

Food, alcohol and party-fare for barbeques will be particularly important, especially if Team GB or individual contenders are doing well. Particularly in London, we expect a lot of party spending amongst sports-mad ethnic minorities.

Fashion and status shopping may not be as important as retailers are hoping as the sort of people who come to the UK for the Olympic Games will not include large numbers of committed shoppers. But they will still spend a significant amount, although 'other spending' also includes subsistence by visitors to and workers at the Games (but restaurants and catering are excluded from these estimates). The 133 million estimate includes the displacement effect of shoppers avoiding London.

Shoppers set to spend 189.8 million more during extended Sunday opening hours

Research carried out by the Centre for Retail Research for Kelkoo, the online website, has shown that the impact of the relaxation of Sunday Trading laws during the Olympics will benefit retailers by a total of 189.8 million.

Almost one-half (47%) of these gains will accrue to London and a further 11% to the South East.

  • Clothing stores could see the biggest boost in income with an 6% weekly increase as consumers are expected to spend 4.9 million more on each of the eight Sundays totalling over 39 million
  • Food stores will enjoy a boost of around 61 million as consumers spend an additional 7.6 million each week of the extended opening hours, a total increase of 3% in Sunday sales.

We have assumed that there will be a rise in food supermarket shopping on Sundays, but much of this will be counterbalanced by a fall in the rest of the week. However the longer hours mean that households will also do comparison shopping (eg for electricals, health and beauty and household items) in supermarkets because shoppers can make a longer day of it.

We also expect more comparison shopping on Sundays during the Olympics - again because there will be more trading hours so people will not need to have everything tied up by 4 pm.

It will also make it easier for tourists to shop in London and more likely that visitors from other parts of the UK will risk a Sunday trip.

The impact in other parts of England and Wales will be less intense, but 2.8% to 2.9% on top of existing Sunday trading will be welcome.

We expect city centre stores to open for longer hours, as well as department stores, stores in major retail parks and supermarkets. Outside London retailers will probably be very realistic and will not open if they thing there will not be much business. Multiple retailers are keen to get the Sunday Trading laws relaxed and so will try to ensure that extended opening for the 8 extra days will be a success.

Any negative impact on smaller stores has not been assessed. The Centre believes that convenience stores may be strongly affected.

Effect of relaxation of Sunday Trading Laws on the LOndon 2012 Olympics