The economic impact of Covid-19

[Demitri_C]

1 hour ago, snowychap said:

The biggest evidence of the reduction in VAT in the hospitality industry is likely to be in a business's P&L and/or VAT return not in a reduction of the total price charged to a customer.

This is what they did last night with our bill, in theory it should have been 12.5% cheaper due to VAT saving, so considering the meal was £26.95, should have been £23.60, instead it was £33, thats 40% mark up they are making

[Sam-AVFC]

8 minutes ago, Demitri_C said:

This is what they did last night with our bill, in theory it should have been 12.5% cheaper due to VAT saving, so considering the meal was £26.95, should have been £23.60, instead it was £33, thats 40% mark up they are making

Independent or chain restaurant? I don't think you can be too upset at small businesses that haven't been able to trade for the last 5 months keeping the marginal profit increase.

Putting up prices on Monday to Wednesday* is bullshit though. Thankfully doesn't seem to be happening down here, but then there are very few places that would add service onto a bill.

* if this is what has been done. Some ingredients have increased massively in price over the last few months. Mackerel for 1.

Edited August 12, 2020 by Sam-AVFC

[snowychap]

26 minutes ago, Demitri_C said:

This is what they did last night with our bill, in theory it should have been 12.5% cheaper due to VAT saving, so considering the meal was £26.95, should have been £23.60, instead it was £33, thats 40% mark up they are making

The meal wasn't £26.95, though, it was £33.

It may have previously been priced at £26.95 but that's irrelevant, really - businesses can decide to charge whatever they want for their plate of food.

 

[LondonLax]

1 hour ago, Demitri_C said:

This is what they did last night with our bill, in theory it should have been 12.5% cheaper due to VAT saving, so considering the meal was £26.95, should have been £23.60, instead it was £33, thats 40% mark up they are making

If you are a business struggling to pay the bills because fewer people are coming round and you’ve been closed for months perhaps you need to put the prices up a bit to survive?

[Demitri_C]

32 minutes ago, snowychap said:

The meal wasn't £26.95, though, it was £33.

It may have previously been priced at £26.95 but that's irrelevant, really - businesses can decide to charge whatever they want for their plate of food.

 

They can of course but it is bullshit as your not saving anything. They have basically made them selves made more profit. Its a shit incentive and i think government could have used the money on something better than this which i appreciate is a different subject

[Davkaus]

What would you suggest?

I was sceptical about it, but it appears to have been reasonably successful.

https://www.theguardian.com/business/2020/aug/11/covid-19-eat-out-to-help-out-used-10m-times-in-schemes-first-week

Quote

Between Monday and Wednesday, footfall rose 18.9% after 6pm across the UK’s high streets, shopping centres and retail parks. Lunchtime visits were up 9.6%.

Still down on last year, considerably, but it seems to be incentive enough for some.

[chrisp65]

3 minutes ago, Davkaus said:

What would you suggest?

I was sceptical about it, but it appears to have been reasonably successful.

https://www.theguardian.com/business/2020/aug/11/covid-19-eat-out-to-help-out-used-10m-times-in-schemes-first-week

Still down on last year, considerably, but it seems to be incentive enough for some.

That’s sort of half a statistic though isn’t it?

What’s the overall impact across the week? Are people eating out on Mondays and Wednesdays instead of Sundays and Thursdays?

I’m sure its been an uplift, just using the word pizza a lot appears to make some people go out and eat pizza, so there will have been an affect. I’d be interested in seeing how much though, in the round.

Edited August 12, 2020 by chrisp65

[Davkaus]

Just now, chrisp65 said:

That’s sort of half a statistic though isn’t it?

What’s the overall impact across the week? Are people eating out on Mondays and Wednesdays instead of Sundays and Thursdays?

I’m sure its been an uplift, just using the word pizza a lot appears to make some people go out and eat pizza, so there’s will have been an affect. I’d be interested in seeing how much though, in the round.

Fair point. Some of the increase may also just be people getting more and more comfortable going out again.

[chrisp65]

As always, there will be multiple factors.

Given it’s only running for 13 days people will feel they need to get out and take advantage quickly. It would be a clever move, potentially, to extend it through September once we get to the end of the month.

As a 13 day treat, the weather must have had a huge impact. 

But, I don’t mean to be negative, I live in a tourism town, if it helps, it helps.

[StefanAVFC]

It's just complete codswallop. I heard they don't do eating out or socializing in France or Italy. 

[blandy]

21 minutes ago, chrisp65 said:

just using the word pizza a lot appears to make some people go out and eat pizza

As a simple advertising strategy, you can’t top it.

[snowychap]

28 minutes ago, Demitri_C said:

They can of course but it is bullshit as your not saving anything.

As explained, the purpose of the VAT reduction is to help out the industry.

It was not simply to save customers money.

Going back to your post, though, you didn't explain what you meant by the meal being £26.95. When was it £26.95?

[snowychap]

3 minutes ago, blandy said:

As a simple advertising strategy, you can’t top it.

Also, one mention leads to another and then to another. It's the Domino's effect.

[bickster]

2 minutes ago, snowychap said:

Also, one mention leads to another and then to another. It's the Domino's effect.

It must be the way you deliver them 

[Demitri_C]

4 minutes ago, snowychap said:

Also, one mention leads to another and then to another. It's the Domino's effect.

Dominos

[StefanAVFC]

6 minutes ago, snowychap said:

Also, one mention leads to another and then to another. It's the Domino's effect.

By Goli...

Edited August 12, 2020 by StefanAVFC

[KentVillan]

I don’t think you can beat up on hospitality businesses charging whatever they want to charge, since they aren’t selling scarce necessities and it’s up to you whether you buy from them. VAT has always been wrapped into the price, so you should know what you’re paying up front.

My concern is that the govt and media have got a bit too fixated on this sector being the main victim of covid & lockdown. I’m not convinced. I work in a sector that in theory should be relatively safe from it all, and we have been struggling to get any traction for months - largely because the stupid furlough scheme penalises people who try to carry on working.

Germany just gave grants to businesses on a per employee basis (I believe) and that has allowed economic activity to continue at closer to normal.

I’m fed up of trying to chase down projects (which can be done 100% remote!) and being told I’ll have to wait for such and such a person to return from furlough. It’s **** insane. No benefit in terms of reducing Covid transmission, but sucks the life out of the economy.

[HanoiVillan]

16 minutes ago, KentVillan said:

I don’t think you can beat up on hospitality businesses charging whatever they want to charge, since they aren’t selling scarce necessities and it’s up to you whether you buy from them. VAT has always been wrapped into the price, so you should know what you’re paying up front.

My concern is that the govt and media have got a bit too fixated on this sector being the main victim of covid & lockdown. I’m not convinced. I work in a sector that in theory should be relatively safe from it all, and we have been struggling to get any traction for months - largely because the stupid furlough scheme penalises people who try to carry on working.

Germany just gave grants to businesses on a per employee basis (I believe) and that has allowed economic activity to continue at closer to normal.

I’m fed up of trying to chase down projects (which can be done 100% remote!) and being told I’ll have to wait for such and such a person to return from furlough. It’s **** insane. No benefit in terms of reducing Covid transmission, but sucks the life out of the economy.

This is the kurzarbeit scheme, right? It seems obviously preferable to furlough, and I don't know why we didn't do it. Maybe we were too rushed.

[KentVillan]

24 minutes ago, HanoiVillan said:

This is the kurzarbeit scheme, right? It seems obviously preferable to furlough, and I don't know why we didn't do it. Maybe we were too rushed.

I got this info secondhand so would be interesting to know exactly what’s in place. My understanding is kurzarbeit is like a much more flexible furlough scheme, but perhaps there were additional grants on top of that?

I think our govt was ideologically opposed to anything that might look too “socialist” and have inadvertently screwed up the market even more. I suspect a more pragmatic government would have done it differently, but these guys are ideologues.

[chrisp65]

1 minute ago, KentVillan said:

I got this info secondhand so would be interesting to know exactly what’s in place. My understanding is kurzarbeit is like a much more flexible furlough scheme, but perhaps there were additional grants on top of that?

I think our govt was ideologically opposed to anything that might look too “socialist” and have inadvertently screwed up the market even more. I suspect a more pragmatic government would have done it differently, but these guys are ideologues.

There’s a lovely quote from Simak that I’ve lost and can’t refind.

Basically, he says we had to forget about ideology and do the right thing.

Which to me, is actually quite a damning condemnation of his own ideology.