After months of closed restaurants and their tentative reopening in July, August saw a boom in dining out. Encouraged by the Eat Out To Help Out scheme, warm weather and fewer foreign holidays, many of the country's pubs, cafés and restaurants thrived.
Practically every chef or restaurateur I have spoken to over the past month has used words like “lifeline” or “saviour” when describing the scheme, which offers 50 per cent off food and non-alcoholic drinks up to a total of £10 per person. Monday to Wednesday, when Eat Out To Help Out (EOTHO) was available, was dubbed the “new weekend”. Customer confidence was restored. I met friends I hadn’t seen since before lockdown, enjoyed the rare phenomenon of British outdoor dining, and visited restaurants I'd never considered before. It has, frankly, been a ray of light.
Several industry bodies called for the government to extend the discount beyond August, including UKHospitality, Greene King, and Grosvenor, a landlord of much of Mayfair and Belgravia that has pledged to reduce rents to tenants who prolong their EOTHO offering. Yet when I hear that many restaurants are extending the deal by funding it themselves, I don't feel like celebrating.
At face value it’s welcome news – more bargains, more meals out. But these restaurants, effectively paying us £10 to walk through the door, are taking a big risk. Financially, of course – some have said they'll be selling meals at cost value. Many staff have reported overwhelming shifts and rude customers (around 700 businesses pulled out of the scheme early). And diners can, for now, queue outdoors; what if it’s 12C and raining sideways? With no outdoor space, there may be a temptation to overfill restaurants to offset the £10, social distancing be damned.
There’s also the issue of expectation. As we acclimatise to discounts, we lower the ceiling of how much we’re willing to pay. Some chefs have tentatively spoken out, fearful of coming across as greedy grinches. Yesterday the Elite Bistros Twitter account posted: “The more businesses that do this the more that will HAVE to join in. The end result is a catastrophe of bankrupt restaurants”, and “WAKE THE F*** UP! there won’t f****** be any [more restaurants] if we encourage a 50% off mindset.” The tweets were later deleted.
Gemma Simmonite, who runs all-day restaurant Gastrono-me in Bury St Edmunds, has been outspoken against EOTHO. After very reluctantly signing up in August, she now describes it as an unmitigated success, with the restaurant breaking footfall records. “We were press-ganged into it a bit. It was ludicrous not to give it a go," she tells me, but admits "I have been proved wrong.”
She is not, however, considering a discount beyond August. “It’s not sustainable. I don’t understand how [other restaurants] can.” Simmonite’s concern is for a discount culture, which doesn’t guarantee success even for nationwide chains. In her eyes, EOTHO should be seen as a one-off, a month in which we enjoyed good times during a difficult year, and gave restaurants a boost in doing so. “If we took it another month, absolutely people would expect it all the time,” says Simmonite.
Discounting is a tough habit to break, and it doesn’t breed loyalty. Think of the last Groupon voucher you used. Did you go back? Probably not – you found the next best deal. Loyal customers are more valuable to restaurants than bargain hunters; in general, they’re willing to spend more. Big businesses can always undercut you, so choosing a different USP, whether that’s atmosphere, quality cooking, friendly service or sustainability, is preferable.
Tommy Banks, chef-owner of Roots in York and the Black Swan at Oldstead, didn’t participate in the scheme, largely because his restaurants were not normally open on some of the discount days. He sees EOTHO as a PR stunt for the government, and while admitting it’s been a success, says in the long term something has to give when it comes to cheap food – whether environmental practices, animal welfare, or staff wages. “At some point the scheme has to finish, it isn’t sustainable,” says Banks.
There’s a public health angle, too. “It may drive unhealthy eating habits, with restaurants often serving meals with a high calorie content, larger portion sizes and often unbalanced components in terms of nutrition and sustainability,” says chef and nutritionist Andrea Zick. Eating out is a lovely treat, but if you start doing it every day, it’s not necessarily healthy. Links between obesity and risk of death from Covid-19, not to mention other diseases, are clear.
Restaurant consultants are torn over how to approach September. Nick Chambers, who works in project and commercial management for restaurants, isn't advising clients to cut prices. Operators should think of other ways, such as creative marketing techniques, to restore their clientele, he says. “All too often, restaurant owners are happy to see bums on seats and can dig themselves into a hole, commercially speaking, with over-discounting their product,” says Chambers.
Asif Muhammad, of Main Course Associates, works with several top restaurants, some of which, like hicce, are funding an extension to EOTHO. Muhammad says the scheme was much needed. “Leaving aside the cash element, the genius stroke was to make people feel comfortable to come out and feel safe again. A reintegration, as it were.”
Muhammad advises restaurants to extend, if they can. “The key reason is consumer confidence.” Yet he admits this should end after September, pointing to parallels with a trend for taste cards a few years ago – every time prices went back to normal, customers were lost. “Discounts are never a great thing in the long term. If your product is right people should pay the right price. But these are not normal times.”
Restaurant operators funding an extension cite giving back to customers, many of whom haven’t had a chance to access a deal (if, say, a restaurant was fully booked throughout August, or they haven’t returned to office and thus haven’t gone into town).
Others say their hands are tied. In an Instagram post, Edinburgh’s New Chapter wrote: “We are very worried that when August finishes, people will stop dining out as often as they do now, so we’ve decided to take the risk and extend the scheme further, even if it means selling the food at cost price.”
Sam Harrison, of Sam’s Riverside in Hammersmith, London, tells me: “It’s definitely a risk, but I don’t think we have a choice. We have to try and keep the momentum going, to keep our team employed.”
There are other ways for the government to support restaurants. Banks cites the VAT reduction (until January) as the best thing to happen, and hopes the current 5 per cent rate won’t be restored to 20, which he says is crippling. Muhammad wants business rates shelved next year. UKHospitality continues to call for a solution to rent issues (some restaurants are being forced to pay rents even for when they weren’t allowed to open). The Scottish government wants an extension to the furlough scheme, in a flexible format that takes into account local lockdowns.
And restaurants can explore alternative income sources. Banks still offers his Made in Oldstead meal deliveries (a lockdown takeaway service that proved popular enough to continue). Some are simplifying menus, others supplementing covers by selling deli produce. Recipe kits are increasingly popular. No one method is likely to be a substitute for bums on seats, however.
EOTHO has been a boon for many restaurants; in the first three weeks, 64 million meals were eaten, and you’ll be hard-pressed to find a dissenting voice among diners and operators. Yesterday, the government announced it won’t be funding an extension; any restaurant continuing the discount into September is funding it themselves. Great for the consumer (some pious ones have said they will tip the extra £10), and to ensure continued footfall into autumn, but restaurants should be wary of sticking with their discount for too long – we may well grow too accustomed to it.