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Retail therapy

Remarkably, refutation of the inevitable benefits of hosting the Games is considered within the Olympic planning documents (Retail, Leisure and Sport Impact Assessment Appendices, Appendix 4 to the Environmental Statement, January 2004) as part of an attempt to calculate the amount and type of retail floor space that the Games could support. The Atlanta Games of 1996 was a retail disaster. The report relates:

Retail sales in Atlanta grew 1.1% at the time of the Olympics in August 1996, which when compared with other cities was one of the lowest rates of growth for the month in the US. Many restaurants were empty during the Games, even Olympic merchandise stores failed to achieve solid sales, and sales in some suburban shopping centres fell by 50%.

It concludes that low spending "was due in part to the low cost nature of the Atlanta Games, which saw a limited number of new facilities constructed in the city centre to capture the potential direct and indirect spending". One might note rather a sluggish US economy.

Even with a buoyant context, consumer spending seems confined to officially sponsored goods and hotel chains, hardly an economic miracle. Major beneficiaries in New South Wales of the 2000 Sydney Olympics were the clothing and soft goods sector (souvenirs) and the hospitality and services sector (take away food). The Australian Bureau of Statistics estimated a net increase of A$164 million (£69.8 million at 2006 prices) in retail turnover in New South Wales in September 2000. The Sydney Olympics also saw "an increase in services spending and souvenir shopping, but [this resulted] in a generally flat retail environment for other sectors during the two week period".

Visitors broke their time between the Olympic Park and the central city (one destination, Darling Harbour, experienced a 292% increase in visitors). Developers made significant investment to the city's retail core. However, the consultants comment: "[A]s has been the case for most host cities the Olympics were a mixed blessing". Main legacy of this consumer rush is retail floor space now serving those living in the former Olympic Park village.

Optimism in the (international) hotel industry about the awarding of the 2012 Olympics to London seems misplaced. A report by the European Tour Operators (ETOA) suggests that countries hosting the Games suffer from a pronounced drop in tourism growth in the years surrounding the event. There is no long term boost to tourism, despite promotional assertions. Athens, for instance, benefited from a 8.2% increase in arrivals in 2002 (over 2001), but in 2003, numbers fell by 1.5%. One month before the start of the 2004 Games, visitor arrivals were down by 12%. Australia saw a growth trend of over 10% decline two years before the Sydney Olympics in 2000; this persisted for over two years after the event. In the five years before the 2000 Games, Australia and New Zealand's tourism exhibited a similar rate of growth, New Zealand lost no similar ground over the same time frame. The report cites a similar Olympic effect in Atlanta, Barcelona and Seoul.

ETOA Olympic Report.

See also: Guardian

A recent study by the Young Foundation (Bridging the Gap: the London Olympics 2012 and South Asian-owned Businesses in Brick Lane and Green Street, 2006) found that fewer than one in five respondents in these key east London restaurant locations were confident that the Olympic Games would confer either medium or long-term benefits on their existing businesses. The remaining respondents were convinced that either the benefits would be short term or stated that they were uncertain about exactly what the Olympics might mean for their businesses. A majority doubted that agency support which might enable them to take up opportunities afforded by the Olympic event would be forthcoming. Nine out of ten said they had received no information from any agency linked directly with the London Olympics. Half of all respondents stated that they did not think that the organisers of the London Olympics were sensitive to the needs of their community. Some respondents in Brick Lane highlighted development pressures in the Spitalfields area, and suggested that the London Olympics, and the large retail and leisure chains that it might attract, could instead displace existing retail and consumption uses. Clearly, there are fears that the Olympics could put restaurants in Brick Lane out of business altogether.

This article is part of the Games Monitor briefing papers available for download from our Media Centre page.