The Great British Dining Experiment (Morning Brew)

 

The Great British Dining Experiment

Τhey say the British restaurant scene is uninspired. But the British restaurant subsidy scene? Highly innovative. 

On Monday, the UK wrapped up a first-of-its-kind “Eat Out to Help Out” policy, which incentivized diners to eat out at restaurants bulldozed by the pandemic.

How? By taking a page from Applebee’s. For the month of August, the UK government paid 50% of the bill (up to $13 per person) for people to eat out on Mondays, Tuesdays, and Wednesdays. Alcohol was not included. 

• Chancellor Rishi Sunak said the scheme would support 1.8 million hospitality sector workers. That sector’s output fell 87% between April and June as a result of pandemic-related restrictions. 

Did it work? 

Economists are right about one thing: people do respond to financial incentives. 

• Diners spent up to 6x more on Mondays than on weekends, according to the finance app Yolt. 
• In the week ending August 25, British dining bookings were up 31% annually, compared to +21% in Germany and -49% in the U.S., according to OpenTable.
• In the first three weeks of the plan, diners claimed 64 million meals (the population of the UK is 67 million).  

Zoom out: Some industry boosters say success is more than just numbers, it’s about mindset. The incentive lured people out of their homes and got them to start participating in the economy again. Almost 40% of people who used the subsidy said it was the first time they ate out since restaurants reopened, according to a hospitality trade group. 

But this story is a lot like a restaurant meal—the bill always arrives at the end. Business Insider crunched the numbers and determined that the incentive cost the government $567 million over the course of the month. 

Looking ahead...restaurants still face impending doom from cold weather, deferred rent payments, and capacity limits. But many found the “Eat Out to Help Out” scheme so valuable that they’re going to continue the discount on their own dime.