Eat Out to Help Out gives August boost to restaurants and pubs

The hospitality sector saw a strong surge in demand last month as patrons took advantage of the Eat Out to Help Out Scheme to frequent restaurants, pubs and cafes.  

Many venues saw trading levels bounce back to normal levels in August after diners devoured the discounts, according to the monthly Coffer Peach business tracker.

However, it said that total sales were still 12.2 per cent below last August’s levels as only 85 per cent of sites had reopened. 

Under the scheme, restaurant customers benefited from a half-price reduction on food and soft drinks of up to £10 on Monday to Wednesday each week throughout August. 

Pub groups had a more mixed trading performance, with like-for-like sales down 3.6 per cent against last August, with total sales down 9.4 per cent.

Drink-led establishments had an especially poor month, with bar groups severely affected by large-scale closures. In addition, only 65 per cent of chain-owned restaurant sites which operated in February were open during the past month.

The analysis said trade at hospitality venues in London ‘trailed significantly’ behind the UK due to the lower tourism and commuting levels. The capital relies heavily on international tourism for its economy, but overseas travel to the UK has plummeted.

‘The August figures are very much a one-off and cannot be used to indicate any trends,’ remarked Trevor Watson, the executive director at Davis Coffer Lyons.

Watson warned though that the end of the half-price concession scheme, furlough programme, and the lease forfeiture moratorium could create a dramatic turn for the worse.

‘The boost to food-led establishments due to Eat Out to Help Out is short term; the longer-term trend is the re-distribution in trade towards residential districts and away from commercial city centres and London in particular.

‘The autumn sees the end of furlough and potentially the end of the moratorium on lease forfeiture. These twin threats are the biggest possible challenge to the industry, so although the doors are open to many pubs and restaurants, the market is more unstable than it ever been.

‘Pictures of people eating out in pub gardens, and healthy-looking like for likes present a misleading and artificial impression of where the market is right now.’

Under the Coronavirus Job Retention Scheme (CJRS), employers can put their workers on furlough and be compensated by the government for 70 per cent of their wages up to £2,187.50 a month. Firms can then add another 10 per cent.

But the plan is due to end on October 31, and there are fears that unemployment will rise considerably and once this happens.

The Treasury Select Committee released a report this morning calling for a targeted extension of the furlough scheme to prevent mass job losses.