Olympics Puzzle?

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John Gilbert, business analyst from JGFR on consumer confidence, exploring the high public demand and interest for London 2012 Olympic tickets.

Just what is happening to the cash put aside to meet the expected envelopes notifying millions of people that they were to be part of the London Olympics?

Strangely there is little in the news about this aspect to the ballot procedure and the impact on spending and savings.

In the GfK/ JGFR London Olympics Barometer carried out last March 17% of adults intended to apply for 2012 tickets, with over a third of adults in London and the South East likely to bid. In March and September 2010 similar ticket application intentions were found.

Demand for tickets was always set to be huge given most people would send in multiple ticket applications. Overall 20 million applications were received for the 6.6 million tickets. While only people who registered could apply it is likely that millions of people were unable to register and apply at the last moment as the system overloaded.

With many people likely to have earmarked savings for the event, the issue is what happens to the substantial level of funds transferred back by the organisers (LOCOG). The majority of people bid for under £500 of tickets and they may well decide to spend rather than save the money.

In the Summer JGFR/GfK Financial Activity Barometer, the proportion of people intending to save, invest or borrow might have been expected to pick up given the surge in confidence in May and the depressed level of expected financial activity in March (71%). Somewhat surprisingly the level of activity is unchanged with slight increases in prospective consumer credit usage and in property- purchase intentions from very low levels in March.

The weakness in expected activity is in cash savings, particularly in the relatively affluent South East where demand has been well above average in the past two quarters.

Overall 28% of the population intend to place a cash deposit in the next 6 months, compared to just 19% in the South East, an unprecedented collapse in savings confidence, from 31% in March. The proportion of people in the South East intending paying into an ISA also fell sharply to 28% from 42% in March. In London, cash savings also fell between March and June to a lower than normal level. Elsewhere in the UK cash savings are generally higher.

At the same time UK consumer confidence in June, measured using the same sample of 2,000 adults as for financial activity by GfK NOP for The European Commission, was 1 point lower in the South East at -20, compared to a 4-point fall in the headline UK measure to -25. In London confidence rose 3 points to -17, its highest level since last November.

Spending confidence in the South East surged, rising 18 points on the month to -49 and along with London (-48) has the highest level of spending confidence in the country. While both measures of spending confidence are below levels of a year ago and it is likely that some Olympics money will return to savings accounts, the coming summer days and nights may see many people re-allocating Olympics money into current spending while others may decide to take a break from austerity.

Q. What has been the experience of Marketing Society members with their individual Olympic ticket bids and what will they do with any returned money?

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Posted: July 18th, 2011 | Author: stuart.treasure | Filed under: Customer Champions, Uncategorized | Tags: , , , , , , , | Leave a Comment »

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