Tesco’s £585 Million Cashback Could Save Restaurants. Will the Government Use It?

Following a blistering attack on the effect of government restrictions on restaurants, pubs, and cafes, the hospitality industry’s principal trade body has called for creation of a “Hospitality and Tourism Recovery Fund.” It has suggested that the funds could come via supermarket giant Tesco, which has played a blinding bit of consumer PR in the run up to Christmas by announcing it will return £585 million of business rate grant support to the government.

The half a billion pound surplus should be used to support businesses that have not received any or sufficient grant support through the pandemic — and which are at risk of closure, the body said in a cleverly timed announcement this morning.

UK Hospitality chief executive Kate Nicholls was more generous in her assessment of the supermarket’s move, calling it “an admirable and altruistic gesture from a company that is clearly in a much better financial situation than the vast majority of the those in hospitality.”

“The question now is what happens to this money, which the government had intended to invest in supporting businesses?”

Nicholls said that the trade body wanted the on government to “earmark that money, to create a fund for those hospitality and tourism businesses that are at high risk of failure, have been closed since March, or that have had no grant support, similar to the Cultural Recovery Fund.” That fund, a total of £500 million, gives theatres and other cultural venues the option of applying for grants ranging between £50,000 and £3 million.

“A Hospitality and Tourism Recovery Fund, including rent support to preserve the future of our high streets, would deliver a huge boost to businesses that are only just clinging onto life right when they need it most,” Nicholls said.

That UK Hospitality has been so swift in staking its claim to this high profile lump sum is telling. Prime Minister Boris Johnson’s token £1,000 gesture to pubs yesterday was roundly considered derisory; the threat to hospitality — and by extension, the wider economy — in the run up to Christmas is front and centre in the minds of policymakers and the general public. If there is no solution to the rent question, which right now will necessarily mean thousands of businesses will close in January, reduced trade at Christmas is at the moment just a warm up for a brutally unforgiving New Year, vaccine rollout or not.

The government now finds itself with a Christmas bonus of its own. The question is: will it use it to help restaurants, and in so doing, afford itself a slice of much needed PR of its own? Or, will it absolutely stack it once more?