The Euro 2016 soccer tournament kicks off this Friday in France. The month-long sport spectacle isn’t only a glorious television event – it’s also a massive business opportunity for sponsors, suppliers and pubs.
Lots of companies will be cashing in on this year’s European Championship, which for the first time will see 24 teams from Iceland to Turkey face off in France. That’s especially true for Adidas, Europe’s largest manufacturer of sporting goods.
The Herzogenaurach-based firm will be equipping nine teams, including world champion Germany and the defending European champion Spain. Adidas’ US rival Nike will be providing uniforms and gear for six teams, while Puma got five. The rest of the teams will be outfitted by smaller companies like Umbro, macron or Juma.
Of course, Adidas isn’t only forking over money for the well-being of its national teams. It wants those three stripes to be splashed across TV screens around Europe and the world as often as possible.
“This year we’ll also be outfitting referees, ball boys and girls and helpers, and we’ll enjoy a high visibility in the stadium and on UEFA channels as part of our official partnership,” Adidas said in a statement.
Tournament or not, Adidas scores big
At the last European Championship in 2012, Adidas sold more than a million German soccer association (DFB) jerseys and more than 7 million balls with the tournament logo. For Germany’s biggest sports retailer, soccer plays a central role in its sales strategy.
While Adidas enjoyed an annual turnover of 1.7 billion euros ($1.92 billion) for soccer-related products the last time the European Championship was held, it sold an even larger amount of the same kind of goods last year – 2.2 billion euros – when there wasn’t even a World Cup or European Championship to boost sales.
Traditionally, many Germans also tend to splurge on new television sets in advance of major soccer events. “New TV sales do, in fact, take off around three weeks before a World Cup or European Championship,” the market research company GfK said. “Retailers facilitate this development with appropriate actions such as sales.”
For the year on the whole, the summer hype surrounding major soccer tournaments doesn’t really make a huge difference. All that happens is seasonal sales peak a bit earlier. For instance, while many customers will buy a new TV for a European Championship, in years without a tournament they’d wait until Christmas.
Early TV purchases
For fans, weather has a big influence on their spending habits from the first kick-off until the award ceremony. “Weather is more important than the performance of the German national team. To put it simply: Good weather means good sales, while bad weather means bad sales,” GfK said.
The Nuremburg-based market researchers measured the sale of beer, soft drinks, snacks and grilled food during the last World Cup. If it was sunny out, like it was in 2006 when Germany hosted the tournament, shoppers were likely to buy an average of 16 percent more food and beverages than they normally would. But the year the German team took home the trophy, a rainy 2014, fans left those steaks and chips on the shelves.
Gastronomy hopes for good weather
Pubs and beer gardens in Germany are expecting a boost in sales during the European Championship, according to Ernst Fischer, the president of Germany’s Hotel and Restaurant Association.
“Whether the Euro 2016 tournament is an athletic and economic success primarily depends on the weather and the performance of the German team,” he said.
One positive factor for restaurateurs is the fact that this year’s matches will last a week longer than usual, from June 10 to July 10. But fans don’t tend to flock to restaurants to watch matches – data suggests they prefer pubs.
Hotels and restaurants are expecting a revenue increase of 2.5 percent. According to GfK’s surveys, a large majority of gastronomers expressed optimism. But their profits are under pressure, Fischer said. Minimum wage laws have drastically increased their costs, as the necessary labor documentations take time to compile. In fact, every second restaurant has noted a retreat in revenues.