World Cup win gives hope to lifting Dutch consumer gloom

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br holland Associated Press A Dutch fan cheers his team at the World Cup in Brazil. If they win, it can add more than 0.25 percentage points to consumption. Photo: AP

The Netherlands, the only country to have lost all three of its football World Cup final games, may regain something locals haven’t seen for seven years if the national team continues its unexpected winning streak in Brazil: positive consumer sentiment.

Dutch household confidence, which stood at minus 2 last month, may take a turn for the better if the experience of 2010, when the national team was a runner-up to Spain, is any guide, according to market research company GfK.

Four years ago, sentiment rose by four points after the competition with 69 percent of the population declaring themselves proud of “Orange”, as the team is nicknamed, said the research director, Joop Holla.

After turning this year’s World Cup odds upside down with a 5-1 revenge victory against Spain in their opening game, the Dutch, led by coach Louis van Gaal and featuring star players Arjen Robben and Robin van Persie, are one win away from a fourth final. The semi-final clash with Argentina in Sao Paulo kicked off last night (the score was not known at the time of going to press).

“The World Cup is making me a bit more positive; I do go to bed with a better feeling,” said Rakesh Mohamed, a 39-year-old fan living in The Hague. Still, Mohamed’s extra purchases are mainly drinks and snacks for watching at home. “It’s not that I’m buying a new TV because of the World Cup.”

Consumer sentiment in the Netherlands, the fifth-largest economy in the euro area, has been negative since October 2007. The nation has suffered three recessions since the start of the global financial crisis, and consumers saw the value of their homes plunge by more than 20 percent.

Even before the World Cup, though, an improvement was in sight. Confidence improved to minus 2 last month from minus 12 at the start of the year.

“As we’re now at the inflection point, this could be the impulse to go from negative to positive,” Holla said.

The Dutch have a little more money to spend. Households’ net real disposable income rose 0.2 percent in the first quarter from the same period last year, the first increase in two years.

The subdued sentiment was reflected in purchases of World Cup-related items, which got off to a slow start as the Dutch showed little faith the team would enjoy success in Brazil, Holla said.

In the 2012 European Championship in Poland and Ukraine, the Netherlands did not make it beyond the first round, losing all three matches. Van Gaal, who said last year he could name eight squads more likely to become world champion than the Netherlands, drew criticism from fans and the media of his strategy ahead of the tournament. Now, after beating Spain, Australia, Mexico and Costa Rica in a penalty shoot-out, the coach said it was the best group he had worked with in terms of team spirit.

Quoted at 28/1 to win the tournament by UK bookmaker William Hill before the tournament began, the odds on the Dutch have shortened to 4/1, meaning a e1 (R15) bet would win e4 plus the return of the stake. The Germans are through to the final, beating Brazil 7-1 on Tuesday. Seeking to win their first title since 1990, Germany are 4/6 favourite to take the trophy with William Hill.

A commemorative coin featuring a silhouette of Van Persie’s diving header to score against Spain sold out in less than two days. The Royal Dutch Mint said it sold 6 000 coins for e9.95 apiece before even minting them.

“We believe that if the Netherlands win the World Cup, the euphoria can help add more than 0.25 percentage points to consumption, which would mean 0.1 to 0.2 percentage point on economic growth,” Marten van Garderen, an economist at ING Groep, said. Even though he expects a World Cup effect on consumer confidence, it is too complex to quantify.

Including the quarter-finals, supermarkets registered e54 million in extra sales related to the World Cup, GfK said yesterday. If the trend continued and the Netherlands reached the final, additional retail sales mighty match the e72m reached during the 2010 World Cup in South Africa, it said.

Retailers are voting for the squad by keeping shelves stocked with goods in national-team colours and offering freebies. The biggest supermarket chain, Albert Heijn, owned by Royal Ahold, which also runs Stop & Shop in the US, gave away an Orange-clad miniature “Hup Holland” hamster mascot for every e15 spent, while Lion Capita’s Hema chain sold orange onesies for adults for e17.50.

“We do see that due to the World Cup people buy more drinks and snacks, so it is indeed good for sales,” Anoesjka Asperslagh, a spokeswoman for Albert Heijn, said, though she declined to give details.

The chain has distributed 45 million hamsters in a nation of 16.8 million people.

Revivals in consumer confidence after similar events in the past levelled out after three months, according to Holla.

This time, though, sentiment might stay higher for longer, he predicted, with a boost from turning positive after such a long period in negative territory. Though that was more likely if the Dutch could actually win the World Cup for the first time, he said.

And the history may be against the team in orange, even if it won yesterday. The Dutch lost 2-1 to host Germany in the 1974 final in Munich and 3-1 to Argentina in Buenos Aires in 1978, before the 1-0 loss against Spain in Johannesburg in 2010.

“If we don’t win, I don’t believe there’ll be a measurable effect’’ on the economy, said Van Garderen. – Bloomberg


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