It would be foolhardy not to extend Eat Out to Help Out offer

IF anyone had any doubts about the effectiveness of the Eat Out to Help Out scheme, they need only take a look at what has been happening at Scotland’s RAD Hotel Group.

The company, which owns popular wedding venues including the Lochside Hotel in Ayrshire and Dalmeny Park on the south side of Glasgow, saw its restaurant business transformed throughout August while the scheme was in force, as reported in The Herald.

Whereas before the offer was introduced restaurants across the six-strong group were welcoming an average of 120 covers per day, that figure surged to around 440 in recent weeks. Tempted by a 50 per cent discount on food and non-alcoholic drinks on Mondays, Tuesdays, and Wednesdays, up to a maximum of £10 per person, diners flocked to RAD group venues in their droves.

Eat Out to Help Out looks to have been a great deal for customers and the business too. Such has been the upsurge in custom that RAD’S owners, Robert and Vivien Kyle, have been able to bring significant numbers of staff back into the fold from furlough. From having 365 of its 450 employees on the job retention scheme on the week beginning July 30, the number on furlough has been reduced to 271.

Now, with the company having decided to fund its own version of Eat Out to Help Out throughout September, there is every chance RAD will be able to reduce its reliance on furlough even more before the job retention scheme is officially wound down in October.

RAD is not alone across the hospitality industry in extending the discount offer in one form or another. In Aberdeen, The Chester Hotel has launched a special promotion for diners who missed out on Eat Out to Help Out because of the local lockdown imposed on the city in recent weeks. Diners are being offered 50% off all food in the hotel’s outdoor Gallery Experience on Mondays, Tuesdays and Wednesdays, from today until September 16.

It is to the credit of businesses such as RAD and The Chester that they are capitalising on the momentum. But there is a compelling case for the UK Government to kick-start its own funding of the scheme, which officially closed last night.

Admittedly, it would not be cheap. Figures released by the Treasury show that businesses across the UK had submitted 87,000 claims at a value of £569.7 million to fund the discount offer from the first three weeks that Eat Out to Help Out was in operation. By that stage, UK consumers had enjoyed more than 64 million discounted meals.

However, while the promotional effort has come at a cost, the Government expenditure must be set against the clear upsides the offer has brought.

As the evidence of RAD Group and other hospitality businesses shows, the upswing in custom driven by the offer is allowing employers to bring staff back from furlough. It has protected jobs and eased the burden on the Government in terms of claims on the job retention scheme.

Eat Out to Help Out appears to have helped restore consumer confidence in dining out again after months of lockdown, and allowed people to enjoy a meal out without breaking the bank at a time of great unease about the economy.

However, with government funding for the scheme now over, there is a danger that momentum will be lost. Crucially, with the job retention scheme coming to a close next month, there is a risk that the amount of redundancies that ultimately transpires in the hospitality industry when furlough ends will be even higher than had funding for Eat Out to Help Out continued.

The hospitality sector has suffered enormously because of Covid-19, even with the backing of various government support schemes, and after months of lockdown it is still not able to operate at full capacity because of continuing social distancing measures.

Eat Out to Help Out has given the industry hope, and it would be foolhardy of the UK Government not to extend the scheme, and fully capitalise on the good it has brought.