Cash tills still ring merrily in this Red Square, thanks to soccer spending
● The party mood that has been a hallmark of the Fifa World Cup in Russia is cheering retailers, restaurants and bars as fans give a boost to consumer spending.
Supermarket chains, electronic stores and eateries report a surge in sales and customer traffic as the world’s most-watched sports event spurs demand for beverages, food and TVs. The flow of foreign and domestic visitors around Russia may give “a material boost” to consumer spending, according to a report by Bank of America.
After President Vladimir Putin spent $11billion (about R147-billion) on preparations, Russia has earned widespread praise for its efficient organisation of the World Cup. The national team’s success in reaching the quarterfinals against expectations also sparked huge excitement among domestic supporters.
Many foreign fans have remarked on the warm welcome they have received, adding to the festive atmosphere in the 11 cities that have hosted matches.
“Sales during game days are four times higher than a typical weekend night and it’s almost all beer,” said Doug Steele, a Canadian whose Papa’s Bar and Grill is on Moscow’s Nikolskaya Street, which became the unofficial epicentre of fan celebrations during the month-long tournament. “It’s complete chaos.”
The World Cup may boost event-related spending in Russia by as much as $5-billion in June and July in areas “like retail sales, paid services, including internet, mobile traffic, as well as domestic travel”, said Vladimir Osakovskiy, an economist at Bank of America. While it will have a “fairly small” overall effect on Russia’s economy, the “total positive impact of the World Cup” may be about one percentage point of monthly GDP split between the second and third quarters, he said.
It is a welcome fillip for an economy struggling to regain momentum after emerging last year from the longest recession this century. While consumer demand is the main driver of expansion, the pace of retail sales growth remains weaker than before the downturn. It averaged 2.4% in the first five months of this year and probably expanded 2.5% in June from a year earlier, according to a Bloomberg survey.
Customer traffic rose between 45% and 63% at Perekrestok supermarkets in host cities in the tournament’s first two weeks, with significant increases in sales of beer,
Sales during game days are four times higher . . . and it’s almost all beer
Doug Steele
Moscow bar owner
soft drinks and snacks, according to X5 Retail Group NV, the country’s largest retailer, which owns the chain. Magnit, Russia’s second-biggest retailer, and another chain, Lenta, reported a similar sales picture.
Sales at Rosinter Restaurants Holding, which has 249 eateries across Russia, are up 30% on average since the World Cup started and have doubled at some locations, according to Sergey Zaytsev, the company’s president. “Foreign visitors usually make up 10% to 15% of customers in our restaurants in Moscow and St Petersburg, but during game days, and especially after matches, it was 90%,” he said.
Russia’s largest electronics chain, M.Video, said sales of TVs and smartphones as well as accessories rose by about 20% in May to June compared to a year earlier.
Even so, World Cup fever may subside quickly once the championship ends today. Among the countries that staged the previous three World Cups, only South Africa registered significant growth in consumption after the tournament.