How England’s Euro 2020 Success Is Impacting the Stock Market

Source: England Football Association

How England’s Euro 2020 Success Is Impacting the Stock Market

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Win or lose on Sunday, England reaching its first major soccer final in 55 years is already having implications for the stock market.

The team’s success is likely to have spurred spending at pubs and with bookmakers, and boosted advertising revenue for broadcasters. “During tournaments like Euro 2020 we often see spikes of higher consumption,” ING Bank consumer analyst Alyssa Gammoudy said in written comments, noting that food retailers and takeout-delivery firms have also benefited as fans come together to watch the games.

The U.K. FTSE 250 Index has risen 0.8% since the first match was played on June 11, outperforming the Euro Stoxx 50’s 1.4% drop. Much of that outperformance may have been due to the cheap valuations of U.K. stocks that have been thrust into the spotlight by an increase in buyout activity. And to be sure, Britain’s midcap stocks still trail continental peers year-to-date.

How England’s Euro 2020 Success Is Impacting the Stock Market

As for the result, bookmakers have it in England’s favor, but only just. Goldman Sachs Group Inc., meanwhile, reckons there’s a 58% chance that England wins the competition -- something it’s never done before. “There’s a first time for everything,” economist Christian Schnittker wrote in a note.

These are some of the sectors in focus:

Pubs

For England’s pubs, Euro 2020 has been bittersweet. While sales may have got a bit of a lift from fan gatherings, patronage has been constrained by social distancing rules that are set to all but end about a week after the tournament concludes. City Pub Group Plc has warned that many fans weren’t watching the games in bars, while shares of pub owner Mitchells & Butlers Plc are down 9.8% since the first match was played.

Supermarkets

The pub sector’s loss has been supermarkets’ gain: While recent rallies in grocery stocks have been mostly driven by the start of a bid battle for Wm Morrison Supermarkets Plc, industry sales in June benefited from the start of the tournament, says HSBC Holdings Plc analyst Andrew Porteous.

A 2.4% decline in U.K. grocery sales for the month year-on-year was “pleasing” as it came against some of the toughest comparisons with last year’s first coronavirus lockdown, Porteous wrote in a note.

Food Delivery

Food and drink for viewing parties is also benefiting takeout-delivery firms that have been keen to elevate their brands. Deliveroo Plc has declared itself “England ’til we dine” in a sponsorship pact with the team, and Just Eat Takeaway.com N.V. is a tournament sponsor.

Deliveroo shares have risen 17% since the event’s opening kickoff, while Delivery Hero SE has added 7.3%.

Bookies

For bookmakers, there’s nothing like a major tournament to get punters punting. Bookies acquire about 95% more new customers in June and July of tournament years versus those without one, according to Morgan Stanley.

How England’s Euro 2020 Success Is Impacting the Stock Market

Still, with delirious English fans wagering on the Three Lions to go all the way, England lifting the tournament could leave bookies like Entain Plc and Flutter Entertainment Plc facing some sizable payouts.

Broadcasters

ITV Plc says its exclusive coverage of England’s semifinal victory over Denmark peaked with 27.6 million viewers across its platforms, making it the most-watched soccer match ever shown on one channel. Thirty-second adverts were selling for as much as 750,000 pounds ($1.04 million), the Telegraph newspaper reported.

The firm and state-owned BBC have shared U.K. broadcasting rights for the tournament, and will both screen Sunday’s final.

Hotels

Spending by fans attending matches in London and Glasgow is expected to have added about 90 million pounds to Britain’s economy, according to Deutsche Bank AG research.

How England’s Euro 2020 Success Is Impacting the Stock Market

That may have provided some small relief for the likes of Holiday Inn-owner InterContinental Hotels Group Plc and Premier Inn parent Whitbread Plc, whose businesses were hit particularly hard by the pandemic.

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