Full-Service Restaurants in France

PROSPECTS

Full-service restaurants suffers from the slowdown in economic activity in 2018

After several years of economic struggles during the review period, linked to the drop in the number of tourists visiting the country and moderate growth in household purchasing power, activity in full-service restaurants recovered slightly in 2017. However, 2018 was disappointing because of domestic factors such as strikes at Air France and SNCF in the spring, the heatwave in the summer and the yellow vests movement, which seriously impacted sales at the end of the year.

Legislative regulations to differentiate and recognise full-service restaurants

Full-service restaurants remained strongly challenged by limited-service restaurants, especially with the rise of bakery products limited-service restaurants, and convenience stores developed by modern grocery retailers. These were favoured by changing consumption habits and their competitive low-cost positioning, which makes them particularly attractive to consumers.

Home delivery sees strong growth, but new challenges arise

Despite strong competition from limited-service restaurants, full-service restaurants remained the largest channel within consumer foodservice in 2018, accounting for more than half of value sales. Nevertheless, and contrary to limited-service restaurants, small and medium enterprises constituted the bulk of sales and employment.

COMPETITIVE LANDSCAPE

Consolidation leads to economies of scale for the leading players

The sluggish growth over the review period, combined with the difficulties encountered by Groupe Flo, led full-service restaurants to consolidate around leading consumer foodservice players. To illustrate, Groupe Bertrand CHR acquired Groupe Flo, Groupe Le Duff purchased the Tablapizza brand and La Pataterie was sold to investment funds in 2017.

Sales events and promotional activity to capture new customers

Following severe difficulties, illustrated by collapses and purchases in the industry, chained players are in a consolidation phase. Whilst they recorded a significant recovery in 2017, some operators even experienced healthy growth in 2018.

New outlet formats to spread across the French territory

The investment needed to acquire a restaurant in France is linked to real estate costs, which sets a high entry barrier for potential newcomers. In addition to the crucial importance of location, rental costs are relatively high, leading chained players to develop franchises to increase their presence in the French territory at a moderate cost.

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