Consumer durables look to England World Cup success for 60% sales uplift

( Cardiff 19.05.2010…) A large proportion of the retail sector is looking to World Cup fever to boost sales by as much as 60 percent to accelerate recovery from the recession, according to leading trade credit insurer Atradius.

The next eight weeks or so could prove critical to sales of consumer durables with companies marketing televisions and HD packages heavily in the run up to the World Cup. Retailers of electrical goods will also be hoping for a strong performance from England, keeping national interest in the competition running high for as long as possible.

Atradius has extensive cover within the consumer durables sector and holds business intelligence on 52 million organisations to monitor and assess credit risks in various markets. Sector analysts within Atradius are expecting sales to fall after the World Cup and say that strategic marketing and a hard push on sales will be key to the economic survival of many businesses over the next few weeks or months. 

Marc Henstridge, Head of Risk for Atradius UK and Ireland said: “As ‘non-essential’ items, consumer durables have been significantly impacted over the last 18 months. But while some companies have disappeared, those that have survived are seeing activity slowly starting to pick up.

“Businesses of all sizes are waiting for what we are labelling the ‘World Cup Effect’ to kick in. Advertising linking products to the World Cup - sometimes very tenuously – has already taken off, but consumer durables retailers are amongst those hoping for the greatest boost. As consumer spend is still tight, more people are expected to watch the matches at home rather than going out. And the longer England remain in the running, the bigger the potential boost to TV and related sales. Some businesses we have talked to are forecasting a sales growth as great as 60 percent from April to June, year on year.

“In alignment with this, companies are launching new products and incentives to encourage spend while prices are dropping as competition between brands is intensifying. This has been aided by the reduced cost of manufacturing products as manufacturers have more capacity while demand plummeted during the downturn.”

Meanwhile, the food and drink industry is also set to benefit tremendously from the World Cup as football fans pour into pubs to watch the matches or buy in supplies to celebrate at home.

Henstridge continued: “Supermarkets have performed steadily throughout the recession as people will always buy food – even higher end food products as people eat out less. But they too look set to benefit from World Cup fever. Ordering and production has already been planned for a surge in sales of barbecue items, snacks and alcohol at supermarkets as well as in off-licenses, convenience stores and pubs. Lower end pubs will do especially well, as will fast food outlets. Consumers can expect to feel inundated with World Cup campaigns with snack food, lager, televisions and promotions dominating the entrances of stores. On the rest of the high street, other retailers will be preparing their own strategies to get through World Cup season, anticipating the usual drop in footfall and spend and working on enticements to shoppers including sales and special offers.

“This period of the year will be ‘recession resistant’ for a microcosm of the economy who are relying on the World Cup to deliver for them. In 2006, the World Cup spurred a £1bn spending spree in the UK on televisions and electrical appliances alone but the economy is much more fragile than it was four years ago. There is no doubt that it will drive higher consumer spending and be a welcome injection into the UK economy. After a slow recovery for the sector, sales are expected to outperform the rest of the year and push up earnings for this quarter. But whilst there is significant investment in World Cup marketing, for many businesses it will be their last chance and it must deliver – and whether it will remains to be seen.”

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About Atradius:  

The Atradius Group provides trade credit insurance, surety and collections services worldwide, and has a presence through 160 offices in 42 countries. Atradius has access to credit information on 52 million companies worldwide and makes more than 22,000 trade credit limit decisions daily. Its products and services aim to reduce its customers’ exposure to buyers who fail to pay for the products and services they buy. With total income of more than EUR 1.7 billion and a 31% share of the global trade credit insurance market, its products help protect companies throughout the world from payment risks associated with selling products and services on credit.

Further information: 

Atradius Corporate Communications 

Jo Aaron

Tel: 02920 824873 / 07768 233338

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