UK dines out on govt-backed restaurant scheme

Jean-Baptiste Oubrier, Agence France-Presse

Posted at Aug 17 2020 10:02 AM

Restaurant tables are spaced to prevent the spread of the coronavirus in London, July 30, 2020. Britain has been laid low by the coronavirus, easily the hardest hit of any European nation, both in public health and in the economy. Andrew Testa, The New York Times

LONDON - A British government scheme to encourage people to visit restaurants, by paying a slice of the bill, has boosted a sector devastated by the coronavirus, according to a study published on Monday.

The incentive -- "Eat Out to Help Out" -- valid Monday to Wednesday through August sees the government contribute 50 percent of the cost of a cafe, restaurant or pub meal, up to £10 ($13, 11 euros) per person.

Analysis from the Center for Economics and Business Research (CEBR) shows that despite the pandemic it has helped to increase diner numbers by more than a quarter year-on-year.

In the first two weeks of August, the number of people who ate out on the scheme's active days leapt 26.9 percent, said the CEBR.

It noted the month-long scheme, crafted by finance minister Rishi Sunak, would give Britain "a much-needed boost towards normality". 

Nina Skero, economist at CEBR, said it was "impossible to deny" that the initiative had been a success.

She noted it encouraged people to use restaurants while also helping people "get back into the habit of socializing", which could provide a broader economic benefit.

However, despite the scheme providing a rare piece of good news for Britain's reeling economy, analysts have noted it could be impacting customer levels on days when it is not in operation.

In contrast to the healthy restaurant figures for Monday to Wednesday, diner numbers fell 21.3 percent on Thursday to Sunday, the CEBR said, citing figures from OpenTable, an online restaurant reservation service.

And for the entire week, there was an overall drop of 7.1 percent year-on-year -- an improvement on the almost 30 percent fall for the period prior to the scheme's introduction.

The government has set aside £500 million to fund the "Eat Out to Help Out" policy, which is aimed at aiding the struggling hospitality sector.

It is one of various stimulus measures announced by Sunak to try to kickstart the British economy, which has been devastated by the pandemic.

Official figures published in August revealed that the UK economy shrank by one fifth in the second quarter of 2020, more than any European neighbor, as the country's virus lockdown decimated businesses and plunged the country into its deepest recession on record.

Britain also has the worst economic record of the G7 richest countries in the world over the same period.

More than 22,000 restaurant jobs have been cut since the start of the year, twice as many as for 2019 as a whole, according to a recent study from the Center for Retail Research. 

It also showed that 1,467 restaurants have closed, an increase of 59.1 percent compared to 2019. 

Among the UK high street chains impacted include Pizza Express, which has announced more than 1,000 possible job losses, and Carluccio's which has collapsed.

© Agence France-Presse