When the Eat Out to Help Out scheme was announced in early July many, myself included, were sceptical. It sounded like a bit of a gimmicky policy, that while innovative, would in practice accomplish little in terms of helping the hospitality sector. My scepticism faded on Aug 3, the first day of the scheme, when I had to queue behind a dozen people to get a salad bowl at a lunch spot where I had not bumped into another customer in weeks. By the time I was back in Cebr’s Old Street office on Aug 10, the second week of the scheme, it was impossible to deny that the Chancellor’s initiative was a success. Monday to Wednesday, restaurants in the area were notably busier than even in pre-pandemic days and the vast majority of our staff who returned to the office this week chose to eat out at a participating restaurant on the eligible days.
Data from OpenTable, a restaurant booking service, confirms my more anecdotal observations. In the first two weeks of the scheme, the number of people eating in restaurants Monday to Wednesday, increased an average 26.9% year-on-year. This compares to an average 21.3% year-on-year decline for Thursday to Sunday in the same period.
One effect of the scheme is that it has encouraged some restaurant goers to eat out Monday to Wednesday, instead of during the other days. Still, looking at the annual change in diner numbers for the whole week commencing August 3, the average change is -7.1%, compared to -28.2% for the week before the scheme started. Hence, even accounting for the redistribution effect, the net impact is a desirable one.
Two weeks ago, Cebr estimated that the coronavirus pandemic has resulted in £2.3 billion of spending in shops, pubs and eateries near London employment hubs being lost or displaced between March and June, as a significant share of the city’s workers continue to work remotely. In August, this is set to reduce to a loss of £178 million and Eat Out to Help Out will be partially responsible for the return of activity.
The Eat Out to Help Out scheme will help businesses recapture some of this lost income in two ways. The first way is the obvious one – the discount is encouraging more people to spend money in eligible restaurants. The second way in which the scheme is helping along the economic recovery is less direct. While the name of the scheme is Eat Out to Help Out, the sentiment is clearly Get Out to Help Out. The goal isn’t just for people to eat in restaurants, but also to get back into the habit of socialising, making non-essential journeys, and being surrounded (albeit not too closely) by groups of strangers. It is arguably this push towards normality that will prove the biggest benefit of the scheme.
Having realised that the economic downturn facing the UK will be deeper and more prolonged if central London and other urban areas remain ghost towns, the government has been trying for some weeks now to nudge people towards their former lifestyles, for example by softening its advice on home working. Judging by the restaurant visits data (and the sounds of clicking glasses and chatter in newly busy restaurant areas) it seems that by restoring confidence and giving people a taste of the old normal, Eat Out to Help Out is doing more to help the UK’s return to normality than the many changes in government guidance have.
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