Leisure round-up – July 2016

It’s hard to ignore the impact on the leisure sector of recent significant global events, including “Brexit”, Euro 2016, a new prime minister and cabinet, recent terrorist attacks and, of course, Pokémon Go. So this edition of our round up takes a brief look at the related interesting news stories in the industry.

Euro 2016: impact on the sector

It’s difficult to assess the individual impact of Euro 2016 on the leisure sector against the noise of the other significant world and UK events in the last couple of months, but early signs are that the tournament has had generated a modest growth in sales. Vianet, a Gordons client, and Propel confirmed early in the tournament that beer sales had spiked by over 40% during the England v Wales match.  It has also been reported in other media that drink-led pubs and bars saw a 2% year on year growth in sales for the month of June as a result of Euro 2016.  Although televising football has given pubs and bars something to celebrate, we can’t help but think that if England hadn’t lost to mighty Iceland and reached the latter stages of the tournament, that the impact would have been much more significant.

Britain’s leisure industry set for boom? 

Brexit, the recent terrorist attacks in Nice and Turkey and the falling value of the pound are likely to have an unexpected positive impact on the leisure industry in this country. British tourists are predicted to take more “staycations” over the next few years as a result of the pound buying less foreign spending money, general uncertainty around the economy following Brexit and terrorist attacks abroad.  The nearest benchmark the industry has is the financial crisis of 2008, when there was an increase in the number of British tourists opting to holiday at home.  However, as a result of the favourable exchange rate post-Brexit the leisure trade here anticipates an unprecedented boost to the sector with the UK set to welcome more foreign visitors.  So perhaps things are not all doom and gloom?  Our commercial property partner Simon Mydlowski has looked at this in more detail for a recent article for Caterer Licensee Hotelier News (click here to read the article).

AB InBev gets US clearance for SABMiller deal

The latest update in this long running merger is that AB InBev and SABMiller have received US antitrust approval. This brings the largest-ever consumer products deal a big step closer to completion, which would result in the combined company having around an estimated 31% share of the global beer market.  The approval has been granted subject to significant conditions.  These include restrictions on any further craft beer acquisitions and ensuring that small brewers continue to have access to independent distribution networks by prohibiting the brewing giant from discouraging beer distributors from selling rival beers.  It is expected that AB InBev will dispose of some of its brands to ease concerns that the merger will result in too much control of the market.  Completion of the merger is expected later this year; watch this space!

Pokémon Go is helping restaurants and bars make money

Now we couldn’t complete our round up without mentioning Pokémon Go, the mobile phone app which was released this week in the UK. For those not in the know, the app uses virtual reality and real-world locations to send players on a quest to catch Pokémon (stay with us).  At face value, Pokémon Go appears to be just another video game.  However, bars, cafes and restaurants in the US, where the app was first released at the beginning of July, have reported a rise in food and drink sales as the game guides players to seek out a Pikachu next to the bar, or perhaps more worryingly, in the toilets.  Businesses can purchase “Lure Modules” with “Pokecoins” to attract Pokémon to their premises, and with them, customers.   It’s predicted that there will be a similar impact on UK bars and restaurants as the phenomenon takes hold this side of the pond.  So if you are prepared to take the time to get to grips with the terminology and harness the power of social media it seems there is money to be made!

If you would like to discuss any of these stories in further detail, please contact Duncan Firman, on 01274 202 174 or at duncan.firman@gordonsllp.com