Was Eat Out to Help Out a success?
The government’s Eat Out to Help Out scheme came to an end on August 31, 2020. Designed to coax people out of their homes and into pubs and restaurants post-lockdown, it could be argued that the scheme was as much about bringing a bit of normality back to our lives as it was about giving the economy a much-needed jump start.
But how exactly did the scheme work? And did it achieve what it set out to?
What is Eat Out to Help Out?
Eat Out to Help Out was a government scheme that offered people the chance to get up to 50% off their food and drinks bill when dining in at participating restaurants.
The scheme ran each Monday, Tuesday and Wednesday throughout August, when diners could get a 50% discount on food or non-alcoholic drinks to eat or drink in, up to the value of £10 per head. Alcohol and service charges weren’t included as part of the deal, nor was takeaway food.
How does Eat Out to Help Out work?
The scheme was simple - eat out at a participating outlet on any Monday, Tuesday or Wednesday in August, and get 50% off your food and non-alcoholic drinks, up to a maximum of £10 per person.
To encourage as many people as possible to take advantage of the scheme, there was no onus placed on customers to apply for vouchers or claim their money back from the restaurant or the government. Instead, participating restaurants would simply make the necessary deductions before giving customers the final bill.
There was no limit on the number of times people could take advantage of the scheme, and all diners in groups of any size could take advantage of the deal.
Once signed up to the scheme, pub and restaurant owners had to claim back from the government any discounts they’d given on food and soft drinks.
Claims could be made seven days from the date of registration and could be submitted weekly.
Up to five claims can be made up until September 30, 2020, covering the following periods:
- August 3rd to 5th
- August 10th to 12th
- August 17th to 19th
- August 24th to 26th
- August 31st
The total number of covers and a claim value for each establishment that has offered the scheme discount must be included as part of any claim, along with the following details:
- Total number of diners (covers) who have used the scheme, including children.
- Total amount of discount given.
- Period claiming for.
If the claim is being made for more than one establishment, the following details also need to be included:
- Records for each establishment.
- Overall total value of the claim for all establishments.
There’s a chance that HMRC could ask business owners for records relating to the scheme, so the following daily records must be kept alongside any other business records:
- Total number of diners (covers) who have used the scheme discount in an establishment.
- Total value of all eat-in food and non-alcoholic drinks sold where the scheme discounts were given.
- Total value of scheme discounts given and claimed for.
Business owners will be given a claim reference number for each claim made and, once everything is verified, the claim amount will be paid into the nominated bank account by BACs, within 5 working days.
How much VAT is charged on Eat Out to Help Out?
Although customers get money off food and drink, VAT is still charged on the full amount of each bill before the discount is applied, which means some business owners might have to do a bit of quick maths if their point-of-sale system doesn’t automatically adjust the VAT correctly. The VAT amount then needs to be reflected in the correct VAT return for the period the transaction took place.
That’s how the scheme worked then, but was it a success?
Did Eat Out to Help Out work?
Although the final figures aren’t yet available, the early indications suggest that the scheme was a success, increasing restaurant spending by more than a third on Mondays, Tuesdays and Wednesdays.
Figures from Barclaycard Payments, which manages almost half (40%) of all UK transactions, has reported an uplift in spending of more than a third (34%) at restaurants and fast food outlets on Mondays, Tuesdays and Wednesdays across August, compared with July.
The Barclaycard Payments data also found that the number of transactions also grew by just over a third (34%) while the scheme was running and, while Sunday remained the most popular day for eating out, Wednesdays received the biggest boost, as spending grew by 40% month-on-month.
Stats from OpenTable, an online booking site, back up the Barclaycard figures by reporting a 53% increase in reservations compared with the same Monday-to-Wednesday periods in August 2019. This compares with a 54% year-on-year drop in Monday-to-Wednesday bookings from July 2019 to July 2020, which suggests the scheme did its job by getting people back into pubs and restaurants.
Figures from the UK Treasury also suggest that the scheme went well - around 84,700 restaurants signed up and have subsequently claimed for more than 100 million meals. At the time of writing, restaurants have made 130,000 claims worth £522 million, but these figures are likely to rise as outlets have until the end of September to claim.
Chancellor Rishi Sunak said of the scheme: "From the get-go our mission has been to protect jobs, and to do this we needed to be creative, brave and try things that no government has ever done before.
"Today's figures continue to show Eat Out to Help Out has been a success. I want to thank everyone, from restaurant owners to waiters, chefs and diners, for embracing it and helping drive our economic recovery."
So far, so good - but how was it for you?
How did diners and restaurant workers find the Eat Out to Help Out scheme?
My own experience of the scheme was overwhelmingly positive - not least because it coincided with a family holiday and a birthday, and so saved me a small fortune. I ate at restaurants right across the UK while the scheme was running, from Fort William to the Wirral peninsula, and had no issues with social distancing or the billing procedures - as expected, the discounts were automatically applied and clearly shown on the bill.
The restaurant workers I spoke to were also glowing about the scheme - our waitress at Grog and Gruel in Fort William was delighted to be back to work and said business had been steady, if not quite as busy as usual for the time of year, but this was largely due to having to reduce the number of covers to adhere to social distancing.
Paula Johnson, manager of the Irby Mill pub in Wirral, was also relieved to be welcoming customers back. The pub has set up more outdoor eating areas to make up for the reduced capacity indoors, and a warm August saw customers flocking back to the popular pub. And although Sunday remained the pub’s busiest day, signing up to the Eat Out to Help Out scheme helped to keep a steady flow of customers coming through the doors between Monday and Wednesday.
We also ate out at Yard and Coop in Liverpool, where an app had been developed for ordering food. Although initially a little tricky to get to grips with - largely because I was ordering for seven people - orders were delivered directly to the kitchen from the app, the discount was applied by tapping in a discount code and payments taken directly from my phone.
The whole system was very efficient and put an end to the usually excruciating wait for the bill - once we’d finished eating, we simply upped and left. Tips could also be left via the app, and our waitress reported no issues with the new ordering system and said she felt the scheme seemed to be working as the place was a lot more busy on Mondays and Tuesdays.
No complaints from me then, but the scheme wasn’t without its critics and not everyone’s experience was positive.
What were the problems with Eat Out to Help Out?
Critics of the scheme ranged from anti-obesity campaigners who feared the scheme would be a green light to promote junk food, while a July forecast from the Institute of Fiscal Studies suggested the scheme would be nothing more than a "giveaway" to benefit those well-off enough to eat out.
While there’s no denying the £500 million put aside by the government to fund the scheme could have gone to more worthy causes than hungry diners, to say it’s simply a giveaway for the already wealthy completely misses the point.
Restaurant owners also complained of hostility towards staff trying to cope with the increased demand and need for social distancing, and also of customers getting around the £10 maximum discount by ordering starters, main meals, desserts and even drinks on separate bills.
Overall though, the scheme seems to have had the desired positive effect on diners, restaurant owners and the economy.
Stephen Wall, managing director and co-founder of Pho, described the scheme as ‘amazing’, saying: “It has certainly benefited our early-week figures and seems to have encouraged the British public to dine out safely, as our restaurants are filling up and staying busy throughout the weekend, too." And some restaurants have seen such an uplift in trade that they’re extending the scheme and footing the bill for the 50% discount themselves.
But the real challenge for all begins now - as the winter months approach, so people’s appetite for outdoor dining will diminish and social distancing rules mean that seats inside will still be at a premium. And then there’s the issue that a large number of people still don’t feel comfortable eating indoors - a recent survey from the Office for National Statistics found that 43% of people are still wary of eating inside restaurants and fast food outlets.
There’s also the issue that a large number of people might not realistically have the money to eat out in the coming months, as government-backed financial support, including the furlough scheme, ends soon.
Has Eat Out to Help Out been extended?
Although the scheme has proven to be popular among diners and business owners alike, the government has decided against extending the scheme past August 31.
Mike Cherry, chairman of the Federation of Small Businesses (FSB) called on the government to keep the scheme running, saying: "The Eat Out to Help Out scheme has been an overwhelming success in getting people back on their high streets and in their town centres. We now need to see it extended to continue the critical support that it is providing for small firms as we enter a period of economic make or break."
But despite these comments, and similar sentiments expressed by restaurant owners and industry figures across the UK, the government decided against a U-turn where this scheme ins concerned.
Even so, some restaurants, pubs and cafes have decided to effectively extend the scheme by offering similar discounts at their own expense, including national chains like Bill's, Harvester, Pizza Hut, San Carlo, Slug & Lettuce, Toby Carvery and Yo! It's also worth checking out if any local independents in your area are offering a similar discount scheme for dining out during the week.
Although ultimately deciding against keeping Eat Out to Help Out running, Sunak hailed its positive impact, saying: “From the get-go our mission has been to protect jobs, and to do this we needed to be creative, brave and try things that no government has ever done before."
He added: “The scheme is just one part of our plan for jobs and we will continue to protect, support and create jobs to ensure we come back stronger as a nation.”
There could be a tough winter ahead, which might require some more imaginative government incentives to ensure we continue to see some green shoots of recovery come springtime.