Eat Out to Help Out Boosts London Restaurants, But Now What?

The government’s Eat Out to Help Out restaurant discount scheme has boosted the U.K. economy during August, according to new analysis by the Guardian.

The scheme, launched by Chancellor Rishi Sunak, offers restaurant-goers 50 percent off food and non-alcoholic drinks up to the value of £10 at participating venues Monday to Wednesday, and will end on Monday 31 August. Coming after lockdown restrictions were eased, the Guardian states that “the release of pent-up demand” had helped drive “the sharpest rebound in economic growth among the G7 advanced economies, while retail spending has returned to pre-crisis levels.”

However, there is concern among operators — in light of a new YouGov poll indicating a 36 percent drop — that demand will fall off into September. While a growing list of London restaurants have announced already that they will continue to offer self-funded discount incentives into the autumn, others are wary of the precedent discounting might set, especially for an industry that works on such tight margins.

Eat Out to Help Out, first thought to have been designed to boost large chains and the kinds of venues au fait with the world of discounts and vouchers, has been taken up by restaurants of all kinds, from those with Michelin stars in Mayfair to neighbourhood independents across London. It has been a huge hit among customers — used nearly 65 million times in three weeks. Restaurant have hailed its success for boosting trade after months of closure occasioned by the novel coronavirus pandemic and subsequent lockdown in April and May.

Nevertheless, significant problems for the hospitality industry cannot be obscured by this temporary uptick — there exist no indications of a medium or long-term recovery in the capital. The scheme’s success has been aided by other factors: for one, a relaxation in licensing laws permitted central London restaurants to offer outside seating for guests, many of whom remain nervous returning to dining rooms in the capital. Warm weather, too, has helped to encourage guests out of lockdown and into restaurants in much higher numbers.

Restaurants in the city however remain concerned about the reduced number of commuters, shortage of office workers, and fewer tourists, which are the lifeblood of restaurants that rely on high footfall to cover high rents. With the support of dozens of the most high-profile chefs and restaurateurs in the capital, the co-owner of St. John has written to policymakers twice to forcefully outline the ways in which local and national government can work together to support the recovery of hospitality businesses. Mayor of London Sadiq Khan, whose actions have been deemed inadequate by some restaurant owners, responded with a letter of his own to the Prime Minister Boris Johnson, asking that the government both extend rate cuts for businesses and protections for workers.

For the moment, restaurant tenants remain protected from eviction from landlords by legislation brought in earlier this spring. When those protections expire at the end of September, and without government intervention before then, those that still owe rent for the months they were closed and unable to generate revenue, face major uncertainty over their future. Trade bodies have repeatedly implored the government to provide protections for both tenants and landlords, with the latest joint proposal calling for “bounce-back” grants to cover 50 percent of rent owed in 2020.

On top of this, and in the event of no further government-led support, mass unemployment in restaurants looks inevitable when the furlough scheme draws to a close at the end of October. Some 3.2 million (80 percent) employees across hospitality have been supported by a programme which has covered — in theory, if not in practice — up to 80 percent of wages since March, and enabled employers unable to return staff to full hours since reopening in July to supplement monthly payments through the government scheme.

If demand does fall as predicted and the government fails to extend its support schemes to industries that were hit earliest and hardest by the pandemic, restaurants in London will enter the autumn beset by many of the same uncertainties that have plagued their year thus far.