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Sunak’s meal deal could help food demand

Farmers may benefit from extra demand from the Eat Out to Help Out measures designed to encourage people to return to restaurants, cafes and pubs.

Rishi Sunak
Rishi Sunak
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Sunak’s meal deal could help food demand

These include a cut in VAT for food and non-alcoholic drinks from 20 per cent to 5 per cent for six months from July 15.

 

Diners will also be able to claim half the cost of their meals from Monday to Wednesday in August, up to £10 a person.

 

Paul Nieduszynski, commercial director at foodservice supplier Brakes, said: “The foodservice sector will no doubt be helped by the announcements in the Chancellor’s summer statement.

 

“We have been predicting a steady rather than spectacular return for the hospitality industry following lockdown, and so far, this appears to be the case.

 

"There are varying reports but a general consensus that volumes are less than half of what we would normally expect for this time of year.”

 

He said the firm has been working with clients to ensure venues are safe to open and expects more restaurants and pubs will open in coming days.

 

Meanwhile, demand in fast food outlets is already almost back to normal.


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Demand

 

Fresh producer supplier Vitaal UK reported demand going ‘through the roof’ in the week pubs and restaurants reopened after steady increases previously. It added that it was able to satisfy the demand as it had increased stock levels in the run-up to the reopening.

 

First figures after the reopening of pubs and restaurants earlier in July show a limited bounce-back and that the August and VAT stimulus may be useful in getting trade back to normal.

 

Overall drink sales in pubs on Saturday July 4 were 49 per cent lower than the average pre-lockdown Saturday, according to pub data analysts CGA. Sunday July 5 sales were 52 per cent lower.

 

Because the VAT decrease only applies to food and non-alcoholic drinks, pubs which largely sell alcohol may increase their food offerings to entice customers in who might spend more on drinks.

 

Figures from Google of movements of people suggest visits to restaurants, non-food shops and places of interest were still 40 per cent lower than pre-pandemic levels in the week to July 7.

 

This compared to Denmark which reopened its foodservice sector in June.

 

There, restaurant visits were 23 per cent more than pre-crisis levels as Danes celebrated escaping the worst of the virus.

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