A mixed Olympic legacy for UK plc

As much as £5.9bn came from business deals brokered during the games at the British Business Embassy, £2.5bn from inward investment and £1.5bn from contracts won by UK companies to supply goods and services in future big sporting events at Brazil and Russia.

But companies themselves reported more mixed results.

There were outright winners. Chime Communications’ sports marketing arm won a lucrative contract for the 2014 Winter Olympics in Russia on the back of work done for the London games.

There were obvious losers, too: a year ago G4S was tipped to benefit hugely, until it failed to supply the number of security staff for the games that had been contracted. The Olympics error was one of the reasons G4S’s sharp-suited chief executive, Nick Buckles, eventually lost his job.

Snoozebox, the pop-up hotel group that supplied beds for about 4,000 staff at the Hainault security village, was forced to delay reporting its first set of full-year results in April after its auditors queried efforts to bank fees linked to the Hainault contract that hadn’t been paid. A management overhaul and an emergency cash call soon followed, while its share price halved in a year.

G4S and Snoozebox arguably shot themselves in the foot. Other potential beneficiaries were handicapped from taking advantage of the games when the government imposed “a no marketing rights protocol”, which banned them from issuing press releases or marketing their involvement. The constraints only expired earlier this year and companies involved can now apply for a licence that explains their role.

The deluge of extra tourists in London failed to materialise. The number of visitors to Britain actually declined during and after the games, with a 4 per cent drop in overseas visits in the three months to September 3, according to the Office for National Statistics. Shopping centres, it pointed out, forced stores to open longer in August, which increased costs – only for shoppers to stay at home to watch television.

Several companies involved in the construction of the Olympic Park have won contracts for other big sporting events, despite marketing restrictions around their role in the games.

Aecom, which designed the master plan of the park that helped London win its Olympic bid, said it had since won a “couple hundred million dollars” in projects directly related to its London 2012 work.

A year on, it is the weather that continues to impact on sales, not year-old pictures of the Olympic rings or torch. According to Nielsen, the consumer research group, the July heatwave contributed to sales growth rates almost twice that achieved by the UK’s leading supermarkets during the London 2012 games.
It seems the golden sun drives sales, rather than gold medals.

Read more