Food distributors call for Eat Out to Help Out extension

Wholesale distributors supplying food to pubs and restaurants have praised the Eat Out to Help Out scheme for restoring weekly sales to last year’s levels – but say further government investment is needed to keep their businesses viable when the initiative ends.

Members of FWD reported weekly sales down 59% year-on-year (YoY) before hospitality reopened in July, but trading was 34% down YoY in the week to 7 August, compared to -41% for the week before the scheme began [1]. Some FWD members report that weekly sales were surpassing 2019 equivalents and that suppliers were having difficulty keeping up with demand.

Data from OpenTable, a restaurant-booking service, shows that in the first two weeks of the scheme, the number of people eating in restaurants Monday to Wednesday increased an average 26.9% year-on-year. This compares to an average 21.3% year-on-year decline for Thursday to Sunday in the same period.

The uplift has prompted wholesalers to call for an extension of the scheme, which ends on August 31, or alternative sector-specific measures after that date, to help them maintain service to their full customer base, which include schools and care homes.

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

“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.”

[1] SalesOut / FWD Wholesale Market summary, W/E August 7
coronavirus covid-19 Eat Out to Help Out Foodservice FWD Government hospitality James Bielby Wholesalers