As England’s World Cup campaign sadly came to an end, it’s worth reflecting on the wider impact major tournaments can have beyond the football itself.
Pubs filled up, living rooms became fan zones and conversations in offices, cafés and shops increasingly revolved around the next match.
But while most of the focus is understandably on what happens on the pitch, major tournaments can also have a noticeable impact on the economy.
From consumer spending and business activity to confidence and even investment markets, sporting events often influence economic behaviour in ways that are easy to overlook.
A Boost for Consumer Spending
One of the most immediate effects of a major tournament is increased consumer spending.
When a national team progresses to the latter stages of a competition, people tend to spend more on social activities. Hospitality businesses are often among the biggest beneficiaries, with pubs, bars and restaurants experiencing increased footfall around match days.
Retailers can also see higher demand for food, drink, televisions, England shirts and other tournament-related products. During previous tournaments, the British Retail Consortium has reported increased demand for items such as food, drink, televisions and home entertainment products.
While much of this spending is temporary, it can provide a welcome boost to sectors that rely on discretionary consumer spending.
The Confidence Effect
Economists often talk about confidence because it matters.
When people feel optimistic, they are generally more willing to spend, socialise and make purchases they may otherwise delay.
Major sporting tournaments can contribute to this “feel-good factor”. While a football match does not change interest rates, inflation or economic policy, a national team’s progress can temporarily lift mood and sentiment across the country.
This effect is difficult to measure precisely, but measures such as the GfK UK Consumer Confidence Index show how changes in sentiment can influence people’s willingness to spend.
In simple terms, when people feel positive, they often behave differently.
Does It Affect GDP?
Potentially, although usually only modestly.
Gross Domestic Product (GDP) measures economic activity across the country. Increased spending on hospitality, retail and leisure can therefore contribute to economic growth during tournament periods.
However, economists are careful not to overstate the impact.
Much of the spending associated with major sporting events is often redirected rather than entirely new. Money spent in a pub watching England may simply have been spent elsewhere if the tournament was not taking place.
The overall economic impact is therefore typically positive, but relatively small when viewed across the entire UK economy.
There Are Winners and Losers
Not every business benefits equally.
Hospitality, food and drink, travel and entertainment businesses often perform well during major tournaments.
Other sectors may see less of an impact.
For example, retail analysts at Springboard reported that when England played in the Euro 2024 quarter-final against Switzerland, footfall in UK high streets fell by 7.7% during the match, while shopping centre footfall fell by 5.2% and retail parks by 4.2%. Similar patterns were recorded during other major England fixtures.
As with many economic trends, major tournaments tend to create winners and losers rather than lifting every sector equally.
What About Investment Markets?
Interestingly, markets are often far less influenced by sporting success than many people assume.
There have been studies suggesting that investor sentiment can be affected by major sporting results, particularly in the days immediately following significant victories or defeats. However, these effects tend to be short-lived.
Over the longer term, markets remain focused on company earnings, economic growth, inflation and interest rates rather than football results.
For investors, the lesson is an important one. While major events can influence short-term sentiment, long-term investment returns are usually driven by fundamentals rather than headlines.
A Reminder About Human Behaviour
Perhaps the most interesting takeaway is what tournaments reveal about human behaviour.
Whether it is football, a heatwave, a royal celebration or a major national event, people do not make decisions based purely on spreadsheets and logic. Emotion, confidence and shared experiences all influence how we spend, save and invest.
England’s involvement in this year’s tournament may now be over, but the competition provides a useful example of how major sporting events can influence behaviour far beyond the pitch.
The economic impact may be relatively modest, but it serves as a useful reminder that economies are ultimately powered by people, and people are not always as rational as economists like to assume.