Dutch World Cup Progress Gives Hope of Consumer UpturnMartijn van der Starre and Maud van Gaal
The Netherlands, the only country to have lost all three of its soccer 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 in June, may take a turn for the better if the experience of 2010, when the national team was 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, GfK Research Director Joop Holla said in a phone interview.
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 now just one win away from a fourth final. The semifinal clash with Argentina in Sao Paulo kicks off at 10 p.m. Dutch time tonight.
“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 soccer 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 in June 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,” GfK’s Holla said.
The Dutch do have a little bit more money to spend. Households’ net real disposable income rose 0.2 percent in the first quarter from the same period in 2013, 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 didn’t even make it beyond the first round, losing all three of its 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 then Costa Rica in a penalty shootout, the coach said it’s the best group he’s ever worked with in terms of team spirit.
Quoted at 28/1 to win the tournament by U.K. bookmaker William Hill Plc before the World Cup began, the odds on the Dutch team have now shortened to 4/1, meaning a 1-euro bet would win 4 euros plus the return of the stake.
Tonight’s winner will face three-time champion Germany, which beat Brazil with a record-breaking 7-1 score yesterday. The Germans, seeking to win their first title since 1990, are 4/6 favorite to take the trophy with William Hill.
A commemorative coin featuring a silhouette of Robin 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 9.95 euros ($13.50) apiece before even minting them.
“We believe that if the Netherlands wins the World Cup, the euphoria can help add more than 0.25 percentage point to consumption, which would mean 0.1 to 0.2 percentage point on economic growth,” Marten van Garderen, an economist at ING Groep NV in Amsterdam, said by phone. Even though he expects a World Cup effect on consumer confidence, it’s too complex to quantify, he said.
Including the quarterfinals, supermarkets registered 54 million euros in extra sales related to the World Cup, GfK said today. If the trend continues and the Netherlands reaches the final, additional retail sales may match the 72 million euros reached during the 2010 World Cup in South Africa, GfK said.
Retailers are voting for the squad by keeping shelves stocked with goods in national-team colors and offering freebies. The biggest supermarket chain, Albert Heijn, owned by Royal Ahold NV, which also runs Stop & Shop in the U.S., gave away an Orange-clad miniature “Hup Holland” hamster mascot for every 15 euros spent while Lion Capital LLP’s Hema chain sold orange onesies for adults for 17.50 euros.
“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 by phone, 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 leveled out after three months, according to GfK’s 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’s more likely if the Dutch can actually win the World Cup for the first time, he said.
And there history may be against the team in orange, even if it wins today. 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 ING’s Van Garderen.