Posted: 29/07/2020

Government hospitality rescue package leaves café owners in a quandary

Details of governement hospitality rescue package leave café owners confused
Social distancing at Farmer Copleys’ Moo Café

Chancellor Rishi Sunak last month announced that VAT will be reduced from 20% to 5% on purchases in cafés and restaurants and launched a voucher scheme to give a 50% discount to people eating out during August, part of the government’s hospitality rescue package.

The new package of government support for the hospitality industry has been well received but left some business owners confused.

“The 50% off offer is a brilliant idea to generate trade, but I feel it should go on a bit longer,” said Steven Salamon of Wally’s Deli and Kaffeehaus in Cardiff. “Anything which encourages people to come out and get a bargain is a good thing.” 

“I think the big chains are most likely going to pass some of the VAT savings on to their customers, but if we start that in the specialist sector, it will be a race to the bottom.”

The VAT cut initially left Salamon uncertain whether the intention was to pass on the savings to their customers or to put the extra money back into the business, but he said: “I’m going to use it to not have to raise my prices.”

Owner of St Albans deli Fleetville Larder, Ed Bevin said he was unsure at first, but has also decided to keep the windfall.

“I’m going to be sticking with my prices and putting the extra turnover back into the business,” he said. “If I cut my prices then put them back up, people will see it as a rise, so it’s not worth it. In a way, it’s offsetting the costs of not being able to have many covers in.”

Unsure whether to sign up for the ‘Eat Out To Help Out’ scheme, he said: “I’m not doing much food at the minute and I’d be fronting the cost and having to do the extra paperwork.”

While extremely happy with the government’s various packages of support, Rob Copley, owner of Farmer Copleys in West Yorkshire and chairman of the Farm Retail Association, was left with questions over the workings of the eat out offer. “The detail behind the schemes is quite hard to understand,” he said. 

“With the 50% off offer, how are we going to keep track through our EPOS systems. My EPOS company say they haven’t got a clue at the moment, they’re all scrambling like mad. 

“It’s very complicated – it’s half price, only on food, up to a maximum of £10 and only on Monday Tuesday and Wednesday. And how do we claim it? I don’t know the figures the government are going to want either.”

Businesses that want to take part in the ‘Eat Out To Help Out’ scheme have to register online. Search for ‘Register your establishment for the Eat Out to Help Out Scheme’ online.

Read the latest issue of Fine Food Digest here.

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