Eat Out to Help Out – How has it impacted the wholesale sector?

The hospitality sector was one of the hardest hit by the Coronavirus pandemic, particularly when the country went into lockdown.

Businesses all over the country closed their doors as the lockdown commenced, with approximately 80% of hospitality businesses stopping trade in April, leading to 1.4m workers furloughed, the highest of any sector. Businesses in this sector began to reopen on July 4. To support these businesses in reopening, the government issued the Eat Out to Help Out scheme, offering diners 50% off meals at participating establishments from Monday to Wednesday throughout August. The offer allows a maximum of £10 discount per person, with the government subsidising the remainder.

The latest Treasury figures show that the government has subsidised over 35m restaurant meals in its first two weeks. Chancellor Rishi Sunak told BBC that this figure “is equivalent to over half of the UK taking part”.

Over 85,000 are now registered on the Eat Out to Help Out scheme, with data from the restaurant booking site Open Table showing restaurants to be 27% fuller on average than they were on Monday to Wednesday of August last year.

This has undoubtably had a large impact on the food supply chain, with many businesses going from being completely closed to reopening and being flooded with bookings as a result of the scheme.

 

Wholesale distributors supplying food to restaurants and pubs in the UK have praised the Eat Out to Help Out scheme for restoring weekly but suggest more needs to be done to support the hospitality sector.

According to the Federation of Wholesale Distributors (FWD), members reported weekly sales down 50% year on year before restaurants, bars and pubs began to reopen in July. Trading was reported to be down 34% year on year in the first week of August, compared to -41% before the Eat Out to Help Out scheme began. Some FWD members are reporting higher weekly sales than the same weekly equivalents in August 2019. Food and drink retail sector magazine, The Grocer, revealed that some wholesalers have seen larger increases in sales, with sales increasing by 50% for a Suffolk-based wholesaler.

This improvement in sales has led to wholesale businesses calling for an extension of the scheme, which ends 31 August, in order to support them in maintaining service to their customers.

 

James Bielby, FWD Chief Executive, said: “Eat Out to Help Out is providing life support to this critical supply chain but it won’t cure the underlying problem,”

“The furlough scheme is coming to an end and with just days to go there is no clarity over what food provision schools will require when and if students return. Combined with the possibility of further national or local lockdowns, we’re facing a potential catastrophe for the foodservice distribution sector in September. Businesses that have already had to endure three months of near-total shutdown cannot be abandoned again.

“Extending the Eat Out scheme until October would give wholesalers the confidence to invest in stock and retain staff. Alternatively, the specific support offered to hospitality operators, which includes business rates relief and grants, must be extended to the companies that supply that sector. We also ask the Government to consider a sector-specific extension of the Coronavirus Job Retention Scheme for food wholesalers and distributors and their customers.”


Find out more about the wholesale sector and Coronavirus on the Federation of Wholesale Distributors website.