The Eat Out To Help Out scheme boosted visits to retail venues by just six per cent on the days the discounts were offered, a study suggests.
Rishi Sunak’s meal deal saw footfall increase by 5.7 per cent in cafes and restaurants but had no impact on the days it was not running, economists found.
Eat Out To Help Out ran from August 3 to 31 and offered customers 50 per cent off up to a maximum of £10 per person on Mondays, Tuesdays and Wednesdays.
The government-subsidised scheme was open to all food businesses registered before July 7 but only 25 per cent used it.
It comes after the Treasury revealed the scheme – launched as a life jacket for a drowning hospitality sector – cost taxpayers £849million after soaring over budget.
Economists from the London School of Economics and What Works Centre for Economic Growth found the impact of Eat Out To Help Out was minimal.
Nicolás González-Pampillón, Gonzalo Nunez Chaim and Katharina Ziegler said it only helped the industry on the days discounts were available.
Eat Out To Help Out ran from August 3 to 31 and offered customers 50 per cent off their meal up to a maximum of £10 per person. Pictured, diners in Windsor in August
It was originally touted as a success, until it was revealed it had cost the taxpayer £849million. Now, a study by three economists has discovered there was only a 5.7 per cent increase in footfall in urban areas during the EOTHP period. Pictured, an advertisement for EOTHO
They wrote: ‘We show that EOTHO induced 5-6 per cent more people to visit retail and recreation venues than would have been expected, and this rise was concentrated on specific days when the discount was available (Mondays to Wednesdays in August).
‘However, the programme failed to encourage people to go out for other purposes or to eat out after the discount ended.’
By retail and recreation venues the authors mean restaurants, cafes, shopping centres, theme parks, museums, libraries and cinemas.
The authors compared footfall in August with the average footfall between January 3 and February 6 last year – before the coronavirus pandemic closed restaurants.
They used areas where the fewest number of restaurant’s signed up to the scheme as a comparison.
The Government-subsidised scheme was open to all establishments registered as a food business before July 7, 2020, but the economists found only 25 per cent took up the offer across the country. Pictured, people out in Soho during the scheme
The aim of the study was to find the difference between footfall in August without EOTHO and what actually happened.
One of the study’s authors, Gonzalo Nunez Chaim, a research economist, told MailOnline: ‘We’re using data collected by Google on how many people were taking a trip to an outlet. This is what we refer to as footfall in the report.
‘We are seeing if there’s a link between percentage of food outlets taking up the Eat Out To Help Out offer in a particular area and the number of visitors to food outlets in that area’.
He said ‘statistical techniques’ were used to estimate what footfall would have been expected in August 2020 without Eat Out To Help Out.
One of the study’s authors, Gonzalo Nunez Chaim, a research economist at the London School of Economics, told MailOnline: ‘We’re using data collected by Google on how many people were taking a trip to an outlet. This is what we refer to as footfall in the report’
Mr Nunez Chaim said ‘statistical techniques’ were used to estimate what footfall would have been expected in August 2020 without Eat Out To Help Out
‘This is based on a take up of 25 per cent across the UK. Had take up been 50 per cent the 5.7 per cent figure would have been doubled. But it was 25 per cent based on the latest data.’
The team used data for restaurants and cafes open in March 2020.
Mr Nunez Chaimso said uptake may have been higher than 25 per cent because some businesses may have closed down between March and August while others that opened in that period will not have counted.
‘The average take up is 25 per cent so we multiple this against the number we got from the statistical technique to find the difference between what actually happened and what would have happened without Eat Out To Help Out.’
They found just a 5.7 per cent increase in footfall to high streets and food outlets after EOTHO was introduced.
People eating on restaurant tables in Soho, London, on Monday, August 31, 2020
People eating on restaurant tables placed outside on Old Compton St in Soho, London, as the government initiative Eat Out to Help Out comes to an end
In August EOTHO was touted as a great success as photographs showed restaurants heaving with customers and Mr Sunak has even suggested it could be brought back this year.
In November he told Sky News: ‘We’ll talk about specific measures, but more broadly I think it’s right when we finally exit this (lockdown) and hopefully next year with testing and vaccines, we’ll be able to start to look forward to getting back to normal.
‘We’ll have to look forward to the economic situation then and see what the best form of our support. We want to get consumers spending again, get them out and about, we’ll look at a range of things to see what the right interventions are at that time.’
Numerous fast food companies took part in the scheme and more than 100million discounted meals were enjoyed. Many restaurants also continued to savings into October, covering the cost of the discount themselves.
But this latest study, published today, suggests the scheme didn’t act as a boost to business and may actually have contributed to a rise in coronavirus cases, the authors wrote.
They said: ‘Our findings suggest that the programme had a limited effect on footfall. Worryingly, Fetzer (2020) concludes that the programme was responsible for between 8 and 17 percent of new COVID-19 cases, thus accelerating the second wave of infections in the UK.’
There were a few issues with the data, the authors said, as they relied on figures collected by Google, which meant the six per cent figure could be an exaggeration.
The said: ‘Footfall data is unlikely to be representative of the UK since only a subset of the population uses Google and consents to share their location history.
‘As a result the data could be biased towards younger people and population with higher incomes, who may also be more inclined to go out in response to EOTHO. If this is the case, our results may overestimate the overall impact of EOTHO.’
They said the scheme had ‘a small effect’ on Thursdays and ‘no significant impact’ between Fridays and Sundays.
They added: ‘We find that the programme increased footfall in the recreation & retail category. This effect is concentrated on days when the discount was available (Mondays to Wednesdays in August). The policy failed to encourage people to go out for other purposes and to eat out after the discount ended.’
Springboard, which collates footfall figures, revealed the average rise in all retail destinations – which includes high streets, shopping centres and retail parks – during EOTHO was 3.6 per cent.
People out in Soho making the most of the last day of the dine out deals last August
More than 49,000 businesses lodged claims for more than £160million meals, statistics released by HM Revenue and Customs revealed
Twitter user Vicky Osgood enjoyed a nine-item breakfast at Gloucester Services, including bubble and squeak and haggis, plus a coffee for £6.20. She tweeted: ‘Probably our last #EatOutToHelpOut meal, but we’ve finished on a cracker’
This ranged from an average of 5.6 per cent on Mondays, 3.1 per cent on Tuesdays and two per cent on Wednesdays week on week.
High streets had the most positive impact with an average rise of 4.1 per cent. This was 7.5 per cent on Monday, 3.3 per cent on Tuesday 1.5 per cent on Wednesday.
Last November it was revealed the scheme to help struggling hospitality businesses cost the taxpayer an eyewatering £849million after soaring way over budget.
The Treasury estimated it would cost £500million. But it overshot that mark by 70 per cent after more than 49,000 businesses lodged claims for more than £160million meals, statistics released by HM Revenue and Customs revealed.
It said the majority of claims – 55 per cent – were made by restaurants, with pubs accounting for 28 per cent of meals.
The Government data revealed that the number of meals discounted by the scheme and the total value of claims increased each week as more people used the offer every week before it ended.
An astonishing 36million meals are believed to have been eaten on Bank Holiday Monday alone in a final cut price blow out.
It also revealed that customers secured an average discount of £5.24 per meal claimed.
HMRC has said that more than 49,000 restaurants, pubs and cafe firms running 78,116 outlets across the country claimed back £849million by the end of September through the subsidy scheme aimed to boost consumer spending after the first national lockdown.
Officials said at the time that the higher than expected spending should be seen as a positive in terms of protecting businesses and jobs.
Chancellor Rishi Sunak has hinted that the successful Eat Out To Help out scheme could make a return to ‘get consumers spending again’ after England’s second lockdown ends
According to OpenTable data, restaurant bookings increased by an average of 53 per cent on Mondays, Tuesdays and Wednesdays throughout the whole of August, compared to the same days in 2019.
Of the claims made, 93 per cent came from small businesses with just one participating outlet. They accounted for 52 per cent of the total discount.
Less than 1 per cent of claims were from businesses with more than 25 outlets, but these businesses made up 34 per cent of the meals claimed for and 27 per cent of the total discount claimed.
MailOnline has contacted Number 10 and the Treasury for comment.