Restaurants, retailers ready for big-game spike

Roland Jones Business news editor • Profile • E-mail

Retailers, restaurants, bars and supermarkets across the country are bracing for an onslaught of free-spending football fans preparing to watch Super Bowl XL on television Sunday.

With close to 145 million people nationwide expected to watch at least part of the game, often at parties or in public venues, the economic impact is significant.

About $5.3 billion will be spent in restaurants and bars, on wagering, on hosting parties, or buying snack foods, drinks and pizza, according to BIGresearch, which conducted a survey on Super Bowl spending for the Retail Advertising and Marketing Association, a division of the National Retail Federation (NRF).

While individual Super Bowl-related purchases are expected to come to $49.39 on average this year, up slightly from $49.27 in 2005, overall spending is expected to decline from $5.6 billion in 2005. The reason for the decline: Fewer people are buying in relation to the Super Bowl this year notes Scott Krugman, a spokesman for the National Retail Federation. “But these people are buying more expensive products, like televisions,” he added.

By comparison the host city Detroit is expecting an economic boost of about $300 million in related revenues to hotels, restaurants, stores and other businesses, according to a study done for the city's Super Bowl host committee by Lawrence Technological University.

“Retailers look forward to the Super Bowl every year, knowing that it means big business,” said Phil Rist, vice president of strategy for BIGresearch. “Home electronics and team apparel sales are sure to beef up retailers’ revenue as consumers hit the stores in anticipation of Super Bowl Sunday.”

Most Americans polled — 66.2 percent — said they plan to do some shopping for Super Bowl Sunday, whether it is purchasing food and beverages, televisions, furniture, or team apparel or accessories.

Consumers expect to purchase 1.7 million new televisions to upgrade for the Super Bowl, compared with 1.4 million in 2005, BIGresearch found. They also expect to buy roughly 800,000 pieces of furniture (including entertainment centers), compared with 530,000 last year.

Nearly a quarter of those polled plan to attend a Super Bowl party, while one in ten plans to host. About 8.3 million consumers will be enjoying the game from a bar or restaurant, according to the survey, although the National Restaurant Association puts that estimate slightly higher at 4 percent of Americans, or about 12 million.

Roughly one in seven Americans, or 15 percent, order restaurant takeout food for a Super Bowl gathering, a figure that rises to 22 percent for younger adults aged 18 to 34, according to the restaurant association. About 58 percent buy pizza, 50 percent buy chicken wings and 20 percent order sandwiches.

America’s premier day for sports viewing is a day of gluttony, ranking as the No. 2 day for food consumption, just behind Thanksgiving, according to the American Institute of Food Distribution. And the game helps make January the top sales month for frozen pizza.

Pizza makers like Dominos definitely expect a boost, says CEO David Brandon.

“It’s far and away the busiest day of the year for us,” he told CNBC. “We expect to deliver 1.6 million pizzas on Sunday, and it’s not only a marketing challenge, it’s also an operations challenge. We have to have full staffing and be ready to go because we have to serve an enormous number of customers during our biggest day of the year.”

While food sales and pizza deliveries are a windfall for supermarkets and restaurants, the big bucks in Super Bowl are spent on marketing during the show by big-name companies hoping to reinforce their brand image with a large, captive audience.

Each year, companies from unknown dot-coms to big consumer products corporations spend millions of dollars to run commercials during the Super Bowl, but the question remains as to whether the money poured into this marketing is money well spent.

“Over $2.1 billion of corporate advertising money is spent on professional football annually, and the Super Bowl is the classic premium buy,” said Rick Horrow, CEO of Horrow Sports Ventures and a visiting professor of sports law at Harvard Law School. “Corporations are willing to spend $2.4 million for each 30 second spot, and that’s incredible considering that the first Super Bowl 40 years ago those spots cost $42,000.”

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