UK’s ‘Eat Out To Help Out’ Drives Patrons To Eateries, But Could Cost Taxpayers Some $662M

In the first two weeks of the United Kingdom’s Eat Out to Help Out campaign, the nation’s HM Treasury estimates diners have purchased 35 million meals from 85,000 restaurants and pubs, the Financial Times (FT) reported.

The Treasury praised the initiative, which provides a 50 percent discount at eateries on Mondays, Tuesdays and Wednesdays during August, bringing people back to dine in.

Eat Out to Help Out was designed to encourage cautious patrons to visit restaurants and pubs after months of shelter in place, according to FT. The government hopes the marketing campaign will encourage people to return to their pre-pandemic habits.

Early reports from the restaurant sector revealed the policy increased reservations during the early part of the week in its first six days of operation. OpenTable, an online restaurant reservation service, reported reservations on the three days of the program in the first two weeks of August increased 10 percent to 48 percent compared to the same period last summer.

But the campaign comes at a steep price.

The establishments are reimbursed by the Treasury. The month-long project is expected to cost taxpayers 500 million pounds (about $662 million), FT reported. That’s atop the government’s decision to cut the value-added tax rate on hospitality, accommodation and attractions to 5 percent from 20 percent until mid-January, costing the Treasury 2.5 billion pounds (roughly $3.3 billion).

Still, Chancellor Rishi Sunak hailed the idea.

“Today’s figures show that Britain is eating out to help out, with at least 35 million meals served up in the first two weeks alone, that is equivalent to over half of the U.K. taking part and supporting local jobs in the hospitality sector,” Sunak said in a statement.

He encouraged more restaurants to take advantage of the program to protect jobs. He pledged the government would reimburse restaurants and pubs for the discounts within five days.

In separate news, U.K.-based The Restaurant Group, which serves casual dining, announced in June that it planned to close 125 locations. It operates the Wagamama and Frankie & Benny’s chains.

The closures come as the restaurant business in the U.K., and elsewhere, reels from the shutdowns caused by the pandemic. The hospitality industry employs about 10 percent of the U.K.’s workforce. As many as 3,000 jobs could be at risk due to The Restaurant Group’s planned closures.