NEWS

LONDON (Dow Jones)--U.K. retailers are gearing up for the World Cup to drive sales as the industry jostles to attract shoppers and fans to stores ahead of the four-week soccer tournament.

The British Retail Consortium estimated the last World Cup held in Germany four years ago was worth GBP1 billion in U.K. sales, and the industry expects the value of this summer's tournament--which is forecast to attract a cumulative global television audience of up to 30 billion people--to be 20% higher due to more favorable scheduling of matches and a greater share of home viewers.

The U.K.'s four largest supermarket retailers by market share--Tesco PLC (TSCO.LN), Wal-Mart Stores Inc.'s (WMT) Asda Group Ltd., J Sainsbury PLC (SBRY.LN) and William Morrison Supermarkets PLC (MRW.LN)--are leading the charge in the sale of beer, soft drinks, snacks, pizzas, barbecues, televisions, T-shirts and footballs ahead of the competition, which starts June 11 in South Africa.

As well as promoting food and own-brand non-food ranges, supermarkets have battled to secure sponsorship deals with domestic and global soccer governing bodies to steal a march on rivals and ramp up trading through official merchandise.

Tesco is the official England team sponsor, which allows it to display the Football Association England crest in its stores and advertisements. Asda's parent company Wal-Mart struck an exclusive deal to sell Federation Internationale de Football Association (FIFA)-branded products like cups, key rings and mascots. Morrisons is a partner of England's bid to host the 2018 World Cup. Sainsbury's has no official sponsorship deal.

"We all know the World Cup tournament is one of the biggest sporting events of the decade and one of the most important events of the year. It is, of course, big business and a major trading opportunity," David Potts, Tesco's board director for retail and distribution, said.

Potts also said trading will be boosted by improved sentiment within the economic cycle, as the event offers a celebratory release for shoppers emerging from a period of deep economic recession and post-election uncertainty. "Consumers are looking for a chance to be proud and have some fun," he said.

Tesco forecasts to sell 8 million packs of 'Match Attax' trading cards, 300,000 televisions, 800,000 flags--up 30% from the last World Cup--and 500,000 official England footballs. It will also sell England team oven gloves and folding chairs.

Asda estimates a 37% and 41% uplift in beer and wine sales respectively. It also forecasts to sell 3.1 million packets of potato wedges and nachos dips and 2.3 million quiches as people hold World Cup 'parties' during the tournament, as well as 18,000 pizzas every 90 minutes--the duration of a soccer match.

Morrisons marketing director Angus Maciver said the tournament is a focal retailing point and preparations start early. "The World Cup is very important. Big summer events are good to hang promotions on. Last summer, there was no (soccer) event and we noticed it. (Marketing investment) is significant during and in the run up. We linked up with our suppliers in March."

Maciver said the tournament will generate overall sales growth for the industry of around 1%, but could drive between 20% and 40% increases for popular product categories like beer, soft drinks and televisions.

Carl Clump, chief executive of payment processing company Retail Decisions predicts "television sales will soar by 28% between May 1st and June 11th this year, compared with the same period in 2009. Retailers could stand to net more than GBP400 million."

Sainsbury's expects a fivefold increase in pizza and pint glass sales, and television sales to more than double. It also aims to sell 50,000 stadium 'Vuvuzela' trumpet horns, commonly blown by fans attending soccer matches in South Africa.

It is not only grocery giants that harness the World Cup as a sales driver. High-street clothing, homeware and electrical retailers are also competing to attract customers.

"We are stocking 200 products across all departments--menswear, kidswear, womenswear, food and home," a Marks & Spencer Group PLC (MKS.LN) spokesman said. The retailer is also supplying the official suit for the England team.

Nat Wakely, director of selling operations at John Lewis Partnership, said the tournament coincides with a period of the year that habitually sees an uplift in electrical goods sales as manufacturers bring out new models in the long run up to Christmas. "For televisions, there is definitely a surge around sporting events. It is a sudden change in pace from previous months."

Electrical retailer DSG International PLC (DSGI.LN), owner of the Currys and PC World chains, is tying its major promotions to the patriotic instincts of shoppers by offering a cash-back deal on televisions bought before the competition starts based on the number of goals the England team scores.

"Our customers have responded really well. We are looking forward to some top-quality football from England," a DSG spokesman said.

U.S.-based rival Best Buy Co. Inc. (BBY), which has recently entered the U.K. market with two store openings as part of a GBP1.1 billion joint venture with mobile-phone retailer Carphone Warehouse Group PLC (CPW.LN), expects a sales boost from fans' tendency to 'trade up' in home entertainment systems, as technology becomes more advanced and less expensive.

"During this period, there's typically an increase in take up of home theatre packages including the latest and greatest televisions, Blu-ray players, exceptional-quality audio equipment and wall mounting kits," Harry Parmar, commercial director of Best Buy U.K, said.

Parmar also said the retailing giant's promotional strategy for the tournament is widespread. "(It is) an extensive above and below the line marketing campaign including radio partnerships and print advertising, media partnerships, direct marketing, social media (and) experiential activity."

One thing that all retailers hope for is that England, keeping sentiment high, can reach the final in Johannesburg on July 11. "I hope England do very well," said Morrisons' Maciver, a Scot, with a smile.

By Simon Zekaria, Dow Jones Newswires; +44 207 842-9410; simon.zekaria@dowjones.com