Ed. Note: Bette Lankfield is based in London, England, site of the 2012 Olympic Games. RSR asked Ms. Lankfield to give our readers a sense of the impact of the Olympic Games on the retail business in London during the Games.

The Games have arrived and the country is buzzing. Economic woes seem forgotten as the nation sits on the edge of its collective seat and wills our athletes on to gold and glory. We have all been surprised at how fabulous it feels to know that the World is watching us and seeing how well we can put on a good show – and it has been a great show. For retailers though the big question is how this will translate into sales. Apparently there is often a drop or at least a skew to retail demand during the Games period. People find it so hard to drag themselves away from the action to carry out their normal activities.

For the UK, where shopping is our favourite leisure activity, this is tricky for the retailers and the effect has become very apparent over the last week. Unfortunately, no-one was talking about this pre-Games and it has come as a bit of a shock, particularly in London where shopper numbers were down by about 10% for the first week. Everyone is hoping now that the momentary dip will lead to a boom during the latter stages of the Games and after they are over. The theory is that the locals will feel proud and positive and feel like spending some money and that people from overseas who have been watching on television will like what they saw and want to visit, bringing their wallets with them. During this second week the West End of London has reported rising sales so either the punters are getting bored with all the sport or they have bought into the feel-good factor generated by our fabulous tally of medals.

Wishing for Gold

The expectations for a glorious summer of gold for retailers were there. Seven years in the planning, the Olympics were a promise of huge tourist numbers and vast profits. Marketing departments were salivating at the prospect of huge campaigns intended to cash in on the euphoria. The Brits are sophisticated shoppers – it’s usually our national sport – and retail marketeers have developed great techniques over the years for predicting how we will behave. They don’t seem to have predicted the down turn in visitor numbers or the, rather obvious in my view, preference people have been showing for watching the sport rather than trailing round the shops. July was a disaster for sales because of the economy, but also because much of the country was under water. The rain may have boosted the demand for umbrellas but everything else was languishing. The promised Olympic boom is desperately needed to help our ailing markets.

The (London Organising Committee for the Olympic Games) LOCOG’s brand protection is tight. The sponsors rules have been even tighter. There were lots of stories about spectators not being able to walk into the stadium with the wrong branded trainers or t-shirts. Silly, but I bet there were some marketing planners at Adidas and Coca-Cola who would have loved to implement even tougher measures. Perhaps it’s a good thing there were no underwear manufacturers in the mix or we might have had strip searches at the gate. As it is some famous brands, for example Pimms, are not allowed to advertise as a brand within the Olympic park and have to be known as ‘No. 1 Cup’.

The brands have been very protective of their rights and there have been a few cases where cheeky retailers have had their flare for band-wagon advertising somewhat stifled – a traditional butcher’s shop in Dorset was asked to remove a display of sausages twisted into the Olympic 5-ring logo and a London cafe had to remove the ‘O’ from its name and will now be forever known as ‘The Lympic Cafe’.

Retailers outside of the Olympic family of sponsors have had to be extra careful to avoid combinations of words or emblems that might be taken to be related to the Games. Amongst the expected restrictions there are phrases that are quite hard to avoid. For example, a combination of ‘London’ and ‘2012′. Tricky if you are a shop operating in London during 2012 and have to tell people about the services available in your shop, in London, during this year, 2012. The words ‘Golden’, ‘Gold’ and ‘Games’ could also get you into trouble so jewellers have been having quite a hard time. This delicate tip-toeing through the rules has resulted in a curious benefit. The promotions in non-sponsor stores can only be described as tasteful. A common approach is to put up strings of international flags as a gesture of support and this has a rather lovely old-fashioned feel that references the event without being obvious. It feels very English.

This doesn’t mean that retailers haven’t been trying. They have been doing everything they can to subtly tempt us in to buy. Carefully worded promotions are everywhere trying to cash in on the national excitement. Rather strangely our Sunday trading hours have been relaxed completely from the usual allowance of 6 hours between 10am and 6pm. Several large chain-stores have taken advantage of this and are opening earlier and closing later than usual. The dip in sales, however, has meant that many of them have taken a hit on staff and energy costs with minimal return. We will see if this extension lasts for the life of the Games if the costs continue to outweigh the benefits. UK retailers have long bemoaned the Sunday restrictions and may have seen this as an opportunity to develop a case for losing them altogether.

Carry On

It’s been rather wonderful to be British in the last week. London and the rest of the UK has been caught up in a national wave of excitement and optimism. Each time our athletes deliver a medal our confidence increases and this may, I hope, have an impact on our economy. Perhaps retailers just need to keep the faith until the end of the Games. The euphoria will still be there and shopping, our favourite leisure activity, will step in to fill up the empty spaces in our lives. Who knows, maybe there will be a rush of people joining gyms and sports clubs, if there is, they will all need equipment. I rather wish that I had invested in a sporting goods business – I have a feeling their time may be coming.