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Euro 2024 tonic on tap for Scottish pubs and retailers

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The on-trade industry is anticipating a surge in foot traffic for the first unrestricted men’s summer tournament since the pandemic, with takings during Euro 2021 hampered by social distancing requirements. That was followed by last year’s one-off winter World Cup which overlapped with Christmas bookings, watering down what is usually a peak period.

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According to market researchers CGA, more than three-quarters of consumers expect to frequent pubs and bars more often while the games are on during the coming four weeks, with 70% preferring the pub experience over staying at home to watch matches. 

“Euro 2024 brings some great opportunities for pubs, bars and drinks suppliers — especially as this will be the first major football tournament that is free from Covid restrictions for six years,” says Violetta Njunina, client director at CGA.

In total, Euro 2024 is expected to trigger a £2.75 billion spending blitz across the UK as fans load up on items such as beer, pizza and new televisions.

In the pubs sector alone, the British Beer & Pubs Association is expecting an extra 20 million pints to be sold. The estimated 300 million pints served will bring in an extra £94m for publicans.

It comes at a torrid time for Scottish publicans who have been struggling with rising costs, staffing shortages, and weaker consumer demand amid the cost-of-living crisis. These are common issues across the UK’s licensed trade industry, but there is also continuing disgruntlement north of the Border about the lack of business rates relief available to counterparts in England.

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Scottish retailers are similarly in a fragile state, with latest figures from the Scottish Retail Consortium (SRC) showing a sharp deceleration in total sales with growth of just 0.1% last month, down from 10.9% in May 2023. Adjusted for inflation, total sales were down 0.5% year-on-year.

“Looking ahead retailers will hope the upcoming run of major events, including the Olympics, European Men’s Football Championships, and a series of high-profile concerts, will kick off a brighter period of trading,” SRC deputy head Ewan MacDonald Russell said.

“Retailers know all too well how cruel summer can be so will hope they can shake it off and be ready for it to be a potential gold rush to get out of the woods in the coming months.”

That respite appears to be in the offing with research by industry analyst GlobalData Retail suggesting as much as £2.1bn will be spent during Euro 2024 on goods such as televisions, sportswear, barbecue equipment and food. That marks an increase of £500m or 31% on the 2022 World Cup.

Spending on food and drink for celebrations is expected to account for £1.4bn of total sales, with many fans opting to watch at least one match at home, or at someone else’s home.

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As fans look to make the most of favourable kick-off times and summer weather, some 4.2 million people are predicted to spend a whopping £70.8m on garden cooking products such as pizza ovens, barbecues, BBQ accessories and utensils. UK retailers are also expected to make £288.6m on electricals such as televisions, £238.1m on sportswear, and £96.2m on merchandise.

These are all figures for which retailers and publicans will be thankful, but one swallow doesn’t make a summer. Warmer weather would certainly be helpful after the Euros come to a close, but other measures within human control are required to stabilise these key economic sectors in the longer-term.

Industry body UKHospitality says the Scottish Government’s failure to offer any meaningful support, along with a lack of action in Westminster, has left businesses at breaking point following the increase in the minimum wage that took effect at the beginning of April, adding £254m to the collective wage bill in an industry where staff costs make up more than half of operating expenditure. Meanwhile, increases to the intermediate and higher property rates represent a further £17m in additional business taxes.

It and other industry groups continue to lobby furiously for changes to create a more level playing field, with calls for the Scottish Government to make good on its pledge to reform business rates. UKHospitality Scotland is calling for a permanently reduced business poundage rate of 30p for the hospitality, leisure and high-street retail sectors.

Other asks include support for businesses following the record increase in the National Living Wage by temporarily reducing the rate of National Insurance contributions by employers. There is also huge support throughout the UK sector for a permanent reduction in the rate of VAT on hospitality, leisure and tourism to 12.5%, returning to the effective policy during the pandemic and matching the average of our continental competitors.

Chancellor Jeremy Hunt failed to deliver on any of these points as he set out his tax and spending plans in his March Budget, but an election is now just weeks away with the Tories on an all but certain road to defeat. Amid the Euro 2024 spending frenzy, retailers and publicans will also be cheering in hope of a change in stance by the incoming government.

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