World Cup win would net huge business profits

A good England showing in the World Cup, which begins on June 11, is particularly important for the UK as it recovers from a deep recession. The country would also have just elected a new government, invariably bringing with it uncertainty.

Fears that the May 6 election will not deliver a clear majority have driven strategists to cut their forecasts for sterling and the new government will have to tackle a burgeoning deficit and slow growth.

So companies can use any help they get from a positive World Cup result: the British Retail Consortium estimates that the 2006 World Cup generated 1.25bn in retail sales and anticipates similar for 2010, with more if England progress further.

A recent survey by PricewaterhouseCoopers showed nearly 15 per cent of consumers intended to buy more if England won the World Cup, treating themselves to new purchases or celebrating in pubs and restaurants. UK bookmakers tip England as third favourites behind Brazil and Spain, and supermarkets such as Wal-Mart's Asda, Tesco, sports retailers like JJB Sports and broadcasters including ITV are betting on the team enduring to the final stages.

Tesco, an official supplier to the England team, is among the firms that has the most to gain from what would be the first English World Cup win since 1966. But a familiar penalty shoot-out exit at the quarter-final stage and a repeat of last year's wash-out summer could scupper the retailer's plans. Greg Hodge, research director at Planet Retail, said the difference between England getting to the quarter-final and the final would be worth around 500m for the economy as a whole.

Wal-Mart, owner of Asda and the world's largest retailer, is one of the companies whose fortunes are most closely tied to the performance of the team. As official sponsor, it stands to see huge pick-up in sales at its stores, particularly if the team progresses to the final stages.

Investors in sports retailers like JJB Sports and Sports Direct will also be anxiously watching as results will be crucial for sales of soccer-related merchandise.

Jean Roche, analyst at Panmure Gordon, said the longer England remain in the competition, the more customers are likely to spend on soccer-related products. The success of the team will also affect electrical retailers, providing a catalyst for a large scale purchase of televisions.

Media firms are also among the best placed to benefit as many should be able to cash in on a surge in advertising targeting the hard-to-reach demographic of young males.