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It’s been just over a week since the Government’s ‘eat out to help out’ scheme launched, and judging by initial impressions, it’s had a significant impact already.
The scheme, which offers diners a 50% discount up to £10 per person on food and soft drinks, is aimed at supporting the struggling hospitality industry, which has faced the highest number of furloughs and closures of any sector.
According to the Treasury, claims were made for 10,540,394 covers – meals served to individuals – as of 9 August, and a total of 83,068 restaurants had signed up to the scheme.
To diners, the scheme might seem like a promise of free money from the Chancellor, but in reality it will have to be paid for eventually – although we’ll have to wait until the autumn budget, or later, to find out how.
With the average claim estimated at £5, the policy has cost around £50 million so far, and the Treasury has set aside a total of £500 million to pay for it.
So, as that amount adds to the increasing cost of support measures put in place this year, will it be worth it?
Aside from offering support to an industry that’s struggled under the coronavirus lockdown, the Government’s efforts to help hospitality businesses are also intended to boost the UK’s recovery later on.
According to the Resolution Foundation, the hospitality industry could be a big contributor to jobs recovery post-COVID, having played an important part in the years after the financial crisis.
Hospitality generated 22% of new jobs for unemployed people in 2010 and 2011, despite accounting for 10% of overall employment.
Although no one can be sure whether the industry will have the same impact on jobs in a post-pandemic world, encouraging more people to support their local restaurants, pubs and cafes could make a big difference to a sector that employs more than 2.4 million people.
Here on UKBF, user BusterBloodvessel shared some first impressions of the scheme at the start of last week (Tuesday 4 August):
“My local is not a ‘busy’ pub for food, especially midweek – usually around a dozen covers on a Monday, maybe 15 to 20 on a Tuesday. They did 42 yesterday and 61 today with more already booked in for tomorrow than they would normally serve on a Wednesday. Their sister pub has been fully booked.
“Another pub we supply with our food has been fully booked two nights running and is turning walk-ins away – good news for us as a small supplier and for their other local suppliers!”
And, as Mark T Jones added, “apart from providing the sector with turnover, it will give operators the chance to refine and perfect their socially distanced operating model.
“It will hopefully also give the dining public the confidence to go to restaurants again.”
Creating a bustle on the high street is surely part of the plan, too – the more people are seen out dining, behind perspex screens or in newly-created pavement cafe spaces, the more likely it is that those holding back will pluck up the nerve to give dining out a try for perhaps the first time since March.
One potential downside to the scheme is that it could shift business away from the weekend, as people adjust their plans to get a cheaper meal in the week.
Retail data provider Springboard reported rises in footfall from Monday 3 August to Wednesday 5 August on the week before, but noted that the week was “one of two halves”, as footfall decreased week-on-week from Thursday to Saturday.
As Mr D pointed out, there’s little benefit to the scheme if it impacts other nights of the week negatively.
“Ideally I suspect the intention is to get more customers now and some to come back afterwards, rather than shifting mostly full weekend meals to early in the week for a month,” he said.
mattk added: “How many covers they do over the whole week is more important than the uplift on Monday to Wednesday. If Friday and Saturday hold up well, then the scheme is a success.”
Others were concerned that the scheme will only reward those who would have gone for meals out in August anyway, and those who don’t necessarily need a discount to do so.
As Aniela put it, “it seems odd to pay for a percentage of a bill for people that would have paid the full amount anyway. That's not stimulating any economy, it's just giving money away for no reason.”
The problem, as other users discussed, is the difficulty of implementing a more targeted scheme quickly enough to make a real difference.
We’ve seen the Government face a similar problem earlier in the year, when the coronavirus business interruption loan scheme was criticised for high eligibility requirements and a slow turnaround.
In contrast, the bounce-back loan scheme had minimal paperwork and promised loans within 24 hours, but it’s been reported that 40%-50% of borrowers will default on their loans, and there’s been widespread concern about fraudulent claims.
The eat out to help out scheme is another example of the Government prioritising a scheme that’s relatively quick and simple to implement over one that’s more precisely targeted.
While the scheme may benefit people who didn’t need it, and it could be open to exploitation – there’s little policing of whether ‘eat in’ meals are really eaten on the premises or not – it’s at least been possible to put it in place this month, at a time when it’s needed.
Finally, the big question is whether just one month of discounts will make enough of a difference to consumers’ habits to overcome the severe disruption that food and drinks businesses have faced since March.
If nothing else, it might just help to get more people comfortable with eating out – and with the opportunity to get £20 of food for £10, or a full English breakfast with a tea for £3, those who’ve given it a go are likely to keep indulging as long as they’re able.
So we get this discount on food, but why don't we get it on household cost too?
Additional discounts on food and meals are also a good idea. Wonder if we can we get more info about that on the official website.