Japan’s Soccer Cheer: Boost or Bust?

Wall Street Journal


Japanese soccer fans celebrate at Tokyo’s Shibuya shopping district, Friday. Will the cheers help the economy? Discounted shoes, hamburgers and more beer — this morning’s Japanese victory in the World Cup has provided companies around the country with a trampoline for selling more goods to customers newly enthused with the national soccer team.

But economists have mixed views on whether Japan’s longer-than-anticipated World Cup run can really inflate consumer spending, and the economy as a whole.

As retailers and consumer goods makers cut prices to try to cash in on the Blue Samurai’s success, Yasuo Yamamoto of Mizuho Research Institute noted that any World Cup effect “probably won’t be observable in figures such as the consumer price index” because the volume of money involved in World Cup merchandise is small compared to the overall Japanese economy.

But others are a bit more optimistic. Katsuhiro Miyamoto, Economics Professor at Kansai University, said he believes the historic 3-1 victory – propelling Japan into the last 16 of the tournament — may have a significant economic effect because of its element of surprise.

Whether a real boost materializes, companies here are wasting no time in trying to reel in the World Cup yen.

FamilyMart, a major convenience store chain operator, plans to place posters in stores from Saturday to let people know FamilyMart is rooting for the Japanese team – and maybe consumer can do so too if they just spend a little more. “Our voices reached the national soccer team,” the posters read. “Go for it – to an even higher place!!”

Elsewhere, Adidas Japan, where its employees wore Samurai Blue uniforms yesterday to work, has been selling special t-shirts that commemorate Japan’s participation in the final stages of the tournament since Friday morning, while shoe retailer ABC-Mart Friday sold special bright Samurai Blue Adidas shoes at a 30% discount to mark the occasion.

At long-time team sponsor Kirin Beer, officials said they expect more retailers to call them to take advantage of its Samurai Blue marketing campaign, and hope to sell more beer than the last World Cup.

And McDonalds Japan started giving online coupons to customers who sign up to a special program that entitle them to buy Quarter-pounder cheeseburgers for 200 yen, nearly half the usual price.

The question on economists’ minds, though, is exactly how long will the feelgood factor last. Japan takes on Paraguay at 11pm local time June 29 for a place in the quarter-finals.

Economics professor Masaru Takagi, of Meiji University in Tokyo, said that while he doubted one single positive result could have a significant result, the victory over Denmark had made people believe that the Japanese team may be “capable of doing something”. Prof. Takagi has calculated that if, as team coach Takeshi Okada has predicted, Japan does succeed in making it through to the semi-finals of the World Cup – a feat viewed as unlikely by most soccer experts — there could be economic benefits of about 50 billion yen for Japan.

But Prof. Takagi is among those that think coach Okada’s target is just a little too far out of reach.