Few medals for Scots firms after Olympic benefit passes them by

By DOMINIC JEFF
Published on 21/09/2012 01:08

FOUR out of five Scottish businesses failed to get any sort of boost from the Olympic Games, according to new research, as further evidence mounted that retailers also failed to benefit from the event.

Despite the organising committee’s initial estimate that the Games would bring £6.5 billion worth of work to UK firms, 82.6 per cent of businesses in Scotland said they hadn’t benefited from the event at all.

Close Brothers’ “business barometer” found that, even in the host city itself, only 22 per cent of enterprises felt the Games had been of benefit in terms of increased turnover.

Ian Steward, head of invoice finance in Scotland, said: “It is disappointing to see that the majority of businesses

surveyed in Scotland did not profit from the 2012 Games as we’d expected it to be a welcome boost to the economy.”

The majority of those businesses that did profit were larger firms with a turnover of more than £5 million a year. Surprisingly, companies in Northern Ireland were most likely to have noticed a pick up in sales during the Games.

The survey was published shortly after official figures showed online sales put in their worst monthly performance in nearly five years last month as consumers watched the Olympics on television rather than shop on the internet.

Non-store retailing sales volumes, which also includes mail order, fell by 6.7 per cent between July and August, the biggest drop since December 2007, the Office for National Statistics (ONS) said. But there was some positive impact at sporting goods stores, which helped sales volumes in the “other stores” category jump 1.5 per cent month on month.

Overall, the London 2012 Games had a negligible effect, as total retail sales volumes dipped 0.2 per cent, following a 0.3 per cent rise in July.

The figures echo survey evidence from the British Retail Consortium (BRC) and CBI earlier this month, which also pointed to a minimal impact from the Olympics.

BRC director general Stephen Robertson said he was surprised by the strength of the overall figures.

“Results reported to us by retailers show that, while the Olympics were spectacular, they didn’t inspire the hoped-for retail rush, leaving August’s overall sales growth much weaker and down on July,” he said.

Suit specialist Moss Bros became the latest retailer to blame Britain’s summer of major events for slower business. It said it had missed out on nearly £2m of hire business due to events such as the Queen’s diamond jubilee and the

Olympic Games as people deferred their weddings to avoid a clash. It expects to recoup the lost income in the current period.

Online grocer Ocado said disruption caused by the Jubilee and Games hit sales, with growth slowing to 9.9 per cent in the three months to 5 August - down from 12 per cent in the previous six months.

Victoria Clarke, economist at Investec, said the distorting effect of the

Olympics made it difficult to gave the true health of the UK retail sector, which had shown tentative signs of recovery signs earlier in the summer.

“Set against a backdrop where UK consumer confidence has been on its worst run in around 40 years, perhaps we shouldn’t be too surprised to see any early summer optimism apparently fading in September,” she warned.