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VIDEOGame Days Make Losers Out of Local Shops
By
John F Kelly Nov 02, 2009 10:00 am
Event-related sales figures don't include "unseen" costs.
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Big sporting events don't always bring financial benefits to local retailers, and can often cause businesses not associated with the event to take a hit, according to the economists. For every visitor to the city who displaces local residents (locals tend to avoid the downtown because of hassles caused by traffic and overcrowding), there's an associated cost for local merchants.“In looking at the three month period around the Salt Lake City Olympics, we found that restaurants and hotels did very, very well in terms of business, but that sales of general merchandise and department stores had a significant drop in their sales during that period and that overall taxable sales in the area actually fell,” Victor Matheson, an economics professor at College of the Holy Cross, says. “There is a shifting around of money. You have more visitors, but they are a different type of visitor, not the regular people who need to go buy socks at Walmart (WMT). So an event that brings in a $100 million from visitors, but loses $90 million from regulars is actually a $10 million event.”
Clemson University economist Skip Sauer says that the local dollars generated by a sporting event can be significant, but only for businesses impacted. Commenting on a report about the financial gains by the city of Tallahassee, Florida, when it hosted the NCAA Regional Baseball Championship in June 2009, Sauer told followers of The Sports Economist, an online forum, “If I were selling Florida State t-shirts and ball caps I'd be delighted: Sales at the Garnet and Gold Stores were up a reported $10,000 to $15,000," he said.
But, he added, "some fans who bought a t-shirt at the regional are likely to wear it to next fall's football game. The purchases in an otherwise dull sporting period for Florida State University substitute from the much larger mass of purchases that stem from the crowds at home football games. Once again, the unseen is more difficult to detect than 'the seen.' "
The same went for most of the po' boy sandwiches sold at a local restaurant during the game, Sauer added. "Some of those dollars were not spent in Tallahassee grocery stores, Tallahassee restaurants more distant from the stadium, and locations in Florida from where some FSU fans traveled.
"Unseen, and hard to measure, but doubtless a significant offset.”
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