It’s the first Tuesday in November. Melbourne Cup Day.
For just under three and half minutes the nation almost stops in its tracks. Business people huddle around the nearest screen, tradies mysteriously disappear, shopping centres are empty, school kids down pens and the streets are deserted as the eyes of a nation are fixed on 24 horses giving it a red hot poke over the 3,200 metre trip.
There’s no doubt that it’s one of those annual events that binds the nation. I’m a little biased, but I’ll call it as Australia’s greatest sporting event of the year. Post-race there’ll always be hard luck stories while others will be celebrating. But the Cup Carnival can dictate the fortunes of some industries too.
At first thought you might expect that the gambling industry stands to lose the most if finances are tight at Cup time. And that’s true.
But there are plenty of businesses whose fortunes rely heavily on Cup Day. Without stretching the thinking too far imagine how much chicken, seafood and champagne is consumed at Melbourne Cup lunches around the country. A huge day for suppliers of those products alone!
A recent IBISWorld report predicts that this year there’ll be winners and losers in associated industries across the Cup Carnival. The report provides some fascinating stats that are a clue to consumer sentiment.
This year overall Cup Carnival spending is predicted to be down 6.1 per cent to $268.9 million. The crowds are expected to be down a little too with attendances at just under 350,000.
Evidently tourism will be a big loser. IBISWorld expects that the high Aussie dollar will mean a 9.4% reduction in tourism spending as international, interstate and regional visitors opt not to travel to Melbourne. The knock-on effects for those in accommodation and hospitality are clear.
Of course Spring fashion retailers are so reliant on the Carnival. This year spending is tipped to increase by one per cent to hit $30.3 million with essentials such as hats, dresses and suits dominating. ($6.18 million on hats and fascinators alone!) The expectation is that mid-level fashion will be the winner as those attending the Cup Carnival look for greater value for their money.
However there’s also a feeling that ladies will make do with wearing existing accessories such as handbags and earrings. The report suggests that beauty spending will dip by as much as 8.7 per cent as race-goers opt to save the dollars they might have spent at the salon by glamming up from home instead. A fair impact on providers of hairdressing, tanning, facials, manicures etc.
Punting is tipped to rise 1.6 per cent. Predictably, gambling tops spending across the whole Spring Racing Carnival. And it needs to perform at this time of year. The IBISWorld report suggests that the gambling industry is suffering with betting on horse racing being very susceptible to public nervousness about economic conditions. Online gambling, gaming machines and sports betting on practically everything these days are making a serious dent in traditional racing wagering. With attendances predicted to be down that’s not good news at all for those who offer on-course betting facilities. (It’s no wonder the racing industry is delighted to have a superstar like Black Caviar to draw bumper crowds every time she goes around.)
So you can see that there’s plenty at stake for the Cup Carnival to be a success.
As for the race itself, the old time punters will always claim that the Melbourne Cup isn’t a race for the purists. Most would consider the Cox Plate to be the true test of weight for age Group 1 racing. But does anyone really care come Melbourne Cup Day? Hardly! Does anyone really mind if northern hemisphere raiders come in and take the Cup? Probably not.
One thing you can bet on is that most of us become experts for a day when we take those few minutes to enjoy one of the world’s great sporting events.
Of course the biggest winners on the day will be the lucky owners, trainer and jockey. As for the winning horse? Well, a good wash down and a gazillion photos with assorted ladies in funny hats. And eventually a very comfortable future at stud boring other horses silly about the glory days, especially the time they lobbed in the big one on that first Tuesday in November.
Alan Kewley is an Account Director at BCM