London shops are being hurt by the Olympics.
West London retailers saw a more than 10 percent drop in their number of shoppers on the day of the Olympics' opening ceremony and the following day from the same time last year, according to research firm Experian FootFall (h/t Bloomberg). After a short boost in shopping activity on the third day of the Olympics, stores in both East and West London saw a year-on-year decline in the number of visitors over the past week, Experian reported.
All the hype about transportation congestion has discouraged visitors and locals from trekking to local businesses. "There has been a lot of nervousness about whether London's transport system could cope with the number of Olympic visitors, and concerns about overcrowding in the capital in general," Neil Saunders of research agency Conlumino told BBC. "This has deterred a lot of people from going shopping, and is a bit of a warning that the Olympics may not be the saviour for retailers."
These initial signs of decreased shopping activity are certainly a disappointment for London retailers who might have expected a boost in sales from all the new visitors. Last month, British Prime Minister David Cameron expressed his grandiose hopes for the Games' effect on the country's economy. "I am confident that we can derive over £13bn benefit to the UK economy over the next four years as a result of hosting the Games," he said.
While major sporting events like the Olympics have long been advertised as a positive stimulus for the host's local economy, mounting evidence suggests that this isn't and won't be the case for the United Kingdom. In a Reuters poll conducted two weeks before the start of the event, 23 out of 27 economists said that the 2012 Olympic Games in London would not deliver any long-term benefits to the United Kingdom's economy, which is currently mired in recession.
A recent report issued by credit rating agency Moody's echoed the sentiments of the Reuters poll, indicating that the Olympics will only deliver short-term benefits to corporate sponsors, rather than provide any lasting economic windfall.
When the Olympics came to Athens in 2004, the positive effects on the local economy proved to be remarkably short term, according to a 2007 report called "A Lasting Legacy for London? Assessing the Legacy of the Olympic and Paralympic Games." The country lost 70,000 jobs in construction in the three months after the Olympics, and the decline in the construction industry's production negatively impacted business confidence in the rest of the Greek economy, the report found.The expense of hosting the Olympics doesn't stop when the spectacle comes to a close. Athens got a bill of about $11.6 billion in November after the Games ended, and a further $103.8 million was calculated as necessary to keep up all the venues built for event, the Boston Globe reported in 2004.