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Eat Out to Help Out: ’31 August 2020’ the end of the discount period for diners?

Eat Out to Help Out: ’31 August 2020’ the end of the discount period for diners?

Today we have a guest blog from Chris Maloney, a partner at Menzies, an accountants, finance and business advisory firm. He questions whether businesses should continue with discounting after the end of Eat Out to Help Out, and if so, how to manage their cashflow.

Eat Out to Help Out: ’31 August 2020’ the end of the discount period for diners?

At the start of August, QikServe’s Preoday product team developed an add-in to allow restaurants to use our technology alongside Eat Out to Help Out. The past month has seen a surge of consumers returning to operators offering the deal, helping to drive revenue and increase footfall after a difficult few months. Now, the question is, what happens next? Will consumers continue to eat out, has the hospitality economy truly been kickstarted or will more need to be done?


A dilemma facing many restaurateurs at the end of August would be whether to continue with any form of discounting following the end of the ‘Eat Out to Help Out’ scheme.

Under the scheme, the government pays half the cost of a meal eaten in August at a café, restaurant or pub on a Monday, Tuesday, or Wednesday, capped at £10, at participating venues. As of 18 August, diners have enjoyed more than 35 million meals since the scheme began on 3 August.

Extending the discount scheme

The scheme is due to end on 31 August, however, restaurateurs will no doubt consider extending some form of discount, at their own cost, to continue the increased traffic into their establishments. This may not only allow for restaurants to generate great PR, but also creates the opportunity to obtain new customers from competing eateries. However, focus needs to remain on providing excellent customer service, generating profit and adhering to the COVID-19 government guidelines, rather than chasing turnover.

Effective forecasting

Detailed profit and loss forecasting will be essential before any discounting decision is made. This will ensure there will still be sufficient profit margin for each part of the menu, after the discount, to cover all fixed costs. Actual results must then be compared to the forecast to see if the discounts need to be adjusted.

The forecast should also highlight whether any dishes need to be removed that are not making the desired profit and will focus the importance of reducing waste, portion control and stock management. Furthermore, this emphasises the need for careful planning, on knowing how much customers are spending, when they are spending this money and what they are spending on, in order that smarter buying decisions can be made and staffing levels and rotas are correct.

Cash flow forecasting will similarly need to be modelled to ensure the business has enough cash to support the restaurant during the extended discount period, as it is crucial to know how and when changes (however small) to sales, purchases and other general business costs will affect the bank balance.

Ideally, a three-way forecast will be prepared, a method of forecasting which links the profit and loss account, balance sheet and cashflow altogether, as there are balance sheet movements that have significant effects on a company’s cashflow, which do not appear in a company’s profit and loss.

Menzies specialises in strategic business advisory and corporate tax for SME businesses. The Hospitality and Leisure team at Menzies appreciate that running a restaurant can be enormously time consuming. Its team is experienced at supporting business with the preparation of three-way forecasts, allowing restaurants, cafés and pubs to prosper during these challenging times – giving customers an experience they will relish and want to repeat.

We strongly agree with the need to forecast before choosing long-term discounting. For those using the Preoday product, the data gathered within their dashboard can help establish a data baseline and reveal historic information that can be used to forecast and make informed business decisions.

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