U.K. cooked up a plan to restart its restaurant industry
British government paid for 50% discount on all meals in August
When the British government told people they no longer had to stay home, it needed a convincing pitch to get everyone back outside and, crucially, spending money.
The answer: half-price food. For the month of August, the government has been paying for a 50 per cent discount on all meals eaten in restaurants, pubs or cafés, up to 10 pounds ($17) per person, on Mondays, Tuesdays and Wednesdays.
It’s a discount that Britons have taken up with relish.
“Last Wednesday, my God, was pandemonium,” said David Williams, a co-owner of Baltic Market, which houses about a dozen street food and drinks vendors inside a converted 19th-century brewery in Liverpool. “There were more people in the queue than there were inside of the building.”
In the first three weeks of the Eat Out to Help Out program, 64 million meals — enough for nearly the entire British population of about 67 million — were eaten using the discount, costing the government 336 million pounds ($585 million).
When Rishi Sunak, Britain’s top finance official, announced the discount last month, he described it as “a first-of-its-kind” means of supporting the1.8 million people working in the hospitality industry. Between April and June, the sector’s economic output plunged 87 per cent.
“They need our support, and with this measure we can all eat out to help out,” he said.
On the first day, Aug. 3, food sales rose 100 per cent compared with the previous Monday, according to CGA, a consultancy that tracks data on eating and drinking out in Britain.
“People, and myself included, underestimated the effect it was going to have,” Williams said of the discount, which includes non-alcoholic drinks. “Most restaurants in Liverpool now, you can’t even get a table for the whole of August Monday to Wednesday.”
The government’s offer, aided by some pleasant weather this August, has encouraged customers to return to restaurants, especially the outdoor seating offered by many establishments. If diners retreat back to their homes once it’s too cold to dine outdoors, however, or unemployment rises as the furlough program ends in October, what then?
“At the moment I’m trying to really enjoy everything about it,” Williams said. “But I just can’t help but feel we’re in a bit of a honeymoon period with it all and that come October, with alfresco dining ending and furlough ending, it’s going to be a very, very different landscape and story.”
Kate Nicholls, the chief executive of UKHospitality, a trade group, added: “People are making hay while the sun shines, and seeing it as an opportunity to build back a degree of resilience” in case the crowds of August thin out in the fall.
On a recent Tuesday evening, the Soho area of central London had taken on a festive atmosphere. Rain held off, and streets were closed to traffic to allow restaurants to put tables outside. Bunting made the socially distanced tables appear more cheerful, and less like a stark reminder of the health risks.
On several streets there wasn’t a single empty table — and they were as noisy as on any prepandemic summer evening. It almost disguised the fact that central London is nearly devoid of office workers and tourists, with most theatres and other attractions still shut.
Before the pandemic, “this was the place to be,” said Stani Visciano, the maître d’ at Lina Stores, an Italian restaurant in Soho. On a typical night, a line of customers would already be waiting when the restaurant opened at 5. The pre-theatre crowd morphed into the dinner crowd, and anyone without a reservation faced a long wait, he said.
On this Tuesday evening the restaurant was fully booked — and again for Wednesday.
But the revenue isn’t the same. The pre-theatre rush has gone. Before social distancing, the restaurant could seat 52 people. Now, fully booked means 40 diners at a time — nearly one-quarter fewer customers.
The British economy fared worse than any other in Europe during the second quarter of the year, because of a longer lockdown period and heavy reliance on consumer spending. To dig itself out of this hole, the country needs people to return to bars and restaurants and cafes and coffee shops in large numbers.
The government set aside 500 million pounds for the half-off discount, an amount that economists didn’t consider to be particularly substantive compared with the 190 billion pounds the government intends to spend on the economic recovery from the pandemic.
After spending months warning of the dangers of indoor public spaces, the government now has to persuade people that it’s safe to return to their previous habits. Throughout this crisis, the government has turned to behavioural economists to help devise different parts of its response — and their principles seem to be hard at work in the Eat Out to Help Out program.
“There are two psychological forces at play,” said Ivo Vlaev, a professor of behavioural science at Warwick Business School, who has been advising the government and National Health Service on its communication in response to the pandemic. (He didn’t work on the meal discount plan.)
The first is habit creation, he said. When someone does something and receives a reward, like the half-off discount, the next time the same situation arises, the memory of the reward encourages a repetition of the action — and this continues until the situation alone, even without the reward, can trigger the action.
The government’s dining discount could be particularly effective at getting people out to eat on their lunch breaks, Vlaev said.
“It’s a very powerful way to change people by habituating their behaviour because they then act on autopilot,” he said.
The second force is known as “psychological commitment,”
Vlaev said: In order to get people to agree to a large request, you get them to agree to something small first. People in Britain might agree to take advantage of the restaurant discount, but once they are out and enjoying themselves the government can more easily ask them to return to offices, gyms, theatres and so on.
And while the Eat Out to Help Out program can help change consumer behaviour, it doesn’t address how each establishment will make up for reduced capacity because of social distancing measures, or what will happen when it’s too cold to dine outside. A recent survey by the Office for National Statistics found that just 43 per cent of people felt comfortable eating indoors.
Baltic Market now has a capacity of 150 to 200 people, at best a third of the number of people it could have fit in before. To accommodate more people through the fall and winter months, the owners say, they are building heated booths so more people can keep dining outside.
“That’s what the big worry is,” Williams said.
“Obviously, we don’t live in California or Dubai, we live in the U.K. So there’s a finite amount of time that you want to eat a bowl of pasta outside,” Williams added.
On a recent Tuesday evening, the Soho area of central London had taken on a festive atmosphere