The "Eat Out to Help Out" May Not Get an Extension, Hospitality to Rely on Early Vaccine Development

August 26, 2020 11:16 PM AEST | By Team Kalkine Media
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  • The scheme which started on 3 August 2020 to help the hospitality industry following the pandemic induced lockdown, has so far seen 64 million meals dished out
  • 84,000 restaurants across the country participated in the scheme, serving out meals that are discounted fifty per cent up to a maximum of £10
  • There has been a concern as well as the hospitality businesses amongst the highest risk businesses as far as the spreading of the pandemic virus is concerned.

The British exchequer has given the indication that it might not give any extension to the "Eat Out to Help Out" programme that was rolled out earlier this month to help out the restaurants in the country. The programme which was only restricted to customers visiting restaurants for meals, and not towards take away' has seen a massive response in the three weeks it has been in implementation. The sales data collated by the treasury over this period shows that as many as 64 million meals have been served during the period meaning that almost one discounted meal has been claimed by all the citizens of the country under this scheme. Chancellor Sunak while speaking about the scheme expressed his happiness at its success, appreciated how the country has come out in solidarity with the hospitality industry and supported the jobs of nearly two million people who work in it. This scheme, however, comes to an end on 31 August 2020, and the government so far has not given any indication of extending it.

According to treasury estimates so far 84,000 restaurants across the country have registered for this scheme, who are serving out meals that are discounted fifty per cent up to a maximum of £10. Data collected since the beginning of the scheme show that even when serving only three times a week, the customer turnout has been 61 per cent higher for the industry than what it was at the same time last year.

The details of this scheme and the various schemes rolled out to help the restaurant industry.

The “Eat Out to Help Out” scheme was rolled out on 3 August 2020 after the government allowed the restaurants to reopen following the lockdown that was imposed in the month of March. The scheme which was aimed at achieving multiple objectives of bringing back people from furlough, alleviate peoples fear from coming out of their homes and give a boost to the hospitality industry to jump-start after nearly three months of inactivity seems to have been achieved the goals to some extent.

Prior to this programme, the government had rolled out two other stimulus measures to help out the hospitality and similar other industries to navigate through the tormentuous lockdown period. The coronavirus small loan scheme was announced by the government immediately after the lockdown was imposed, to help these businesses to pay for their essential expenditures while most of their revenues had dried up. The second was the furloughing scheme which helped the affected businesses place several of their employees under the benefit of the scheme, ensuring that their jobs were protected. Both of these schemes thus helped most of these businesses from disintegrating and their employees from getting dislocated. The schemes are, however, still in existence and continue to provide support. The furloughing scheme, along with the Eat Out to Help Out schemes, are however coming to an end on 31 August 2020.

The state of the restaurant and hospitality industry since the lockdown

The restaurant and the larger hospitality were some of the most affected industries because of the coronavirus pandemic. Most of these businesses which are more often than not dependent on their cash registers were given a jolt as their revenue streams stopped suddenly and they did not have many resources to support themselves beyond a few days.

These businesses are also amongst the highest risk businesses as far as the spreading of the pandemic virus is concerned. A higher number of footfalls in these businesses usually means more revenues for them and is also the yardstick with which its success is measured. On the same time, higher footfall also means a greater number of people meeting each other and consequently the chances of getting infection also increase by several degrees of magnitude. Thus when the government decided to open up the lockdown in the first week of May, it did not give preference to open up this sector in the first phase but instead allowed it to open in subsequent phases in June.

One of the characteristics of the restaurant and hospitality industry is that it employs a very large number of young, unskilled, and semi-skilled people whose jobs were at risk because of the lockdown. The government, though allowed the industry to open, has put in place strict social distancing and safety measures. These restrictions, which also prescribe how many people can enter these establishments at a time is not only making their operations difficult than before but is also slowing down their recovery.

The vaccine silver lining

The withdrawal of most of the social distancing measures as well as more people feeling confident about coming out of their houses can only happen when the threat level of the pandemic comes down. As of now, the pandemic continues to spread across the country unabated, though at a significantly slower pace, however, till a majority of the population do not get inoculated, it is unlikely that the threat level will go down. On the latest development on the vaccine front, the much-hyped Oxford University- AstraZeneca vaccine candidate is expected to meet its deadline and be available by September after which the vaccination process will start.

The last quarter of the year is usually the most important part of the year for the restaurant and the hospitality industry. It is the holiday season when most people come out and spend. If the government is able to complete a majority of the inoculation process by then, then this industry could see a similar state of recovery, as has been seen in the month of August. The Eat Out to Help Out has given a good head start to the restaurant and the hospitality industry, with the holiday season around the corner, it should be able to turn the corner on the pandemic slowdown.


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