U.K. Restaurants Brace for Empty Tables as Support Ends

Summer has ended for Britain’s restaurants after a bumper August fueled by government subsidies to get people eating.

Data from reservation service OpenTable show that the number of diners barely rose year-on-year in recent days after the withdrawal of the government’s “Eat Out to Help Out” program, which had given patrons discounts Monday-Wednesday. The 2% increase compares with a surge of more than 90% last week.

Growth peaked at 216% on Monday this week, which was a holiday in the U.K.

U.K. Restaurants Brace for Empty Tables as Support Ends

One positive in the figures is that the gains on Tuesday and Wednesday, albeit small, at least end the almost non-stop declines seen before August.

But the temporary boost may not be enough for some businesses, which are still recovering from the coronavirus restrictions.

Many could not make it out of the lockdown, with chains such as Bella Italia, Cafe Rouge and Byron shutting outlets. Pret-A-Manger, Britain’s popular high street coffee and sandwich shop, cut almost 3,000 jobs last week.

The subsidy program far exceeded expectations, with the government saying it helped to protect 1.8 million jobs.

The OpenTable data show a big spike in reservations on Mondays, Tuesdays and Wednesdays in August, averaging year-on-year gains of about 50%. Spending in restaurants and fast food outlets was up 34% compared with the same days in July, according to Barclaycard.

While the government subsidy is gone, some restaurants are extending discounts to try to keep customer momentum up.

The challenge is huge, however, with sector battling consumers’ fear of the virus, job worries and increased saving. On top of that, home working means coffee and snack chains like Pret that feed off office goers have a tough road ahead.

©2020 Bloomberg L.P.

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