Full-Service Restaurants in France

2020 IMPACT

Almost five months of lockdowns and one month of curfew results in an annus horribilis for full-service restaurants

Due to the fragile profitability of independent outlets, full-service restaurants (FSRs) were already on a downwards trend (with losses of almost EUR1 billion from 2015-2019) when the COVID-19 pandemic started in France in mid-March 2020. The channel had experienced a number of scenarios which had a negative impact on demand towards the end of the review period, including an unstable economy, a drop in tourism, moderate growth in disposable incomes, and the impact of the “Gilets Jaunes” (Yellow Vests) which resulted in demonstrations against economic injustice in the country in late 2018.

Disparate results during summer unable to save the year, despite small boosts seen

Initially, the recovery from June to early September was such that some players still deemed it was possible to partly offset the collapse between March and May. However, a deeper analysis of what occurred revealed that the summer season was not so dynamic at a national level.

Even successful chains face challenges, as Courtepaille is acquired by Buffalo Grill

Despite more solid marketing and financial security than independent FSRs, chains also took a backseat in 2020. Their cash resources were depleted after a few weeks of challenges and many encountered great difficulties in trying to survive the impact created by COVID-19.

RECOVERY AND OPPORTUNITIES

“Survivor takes all” strategy in collapsing environment provides opportunities for some stronger players

At the end of 2020, during the second lockdown, movement restrictions were eased and most non-grocery store-based retailers were allowed to open. However, eat-in dining remained banned until further notice and this was a hard blow for full-service restaurants, as dine-in capacity secured more than two-thirds of sales in 2020.

European FSRs cited as more fragile than those offering exotic and international cuisine

European FSRs are likely to suffer more than those offering exotic and international cuisine. Although French consumers will remain fond of traditional local cooking, driven by the locavore trend and the need for authenticity, the most valuable category in this sense will also remain the most fragile.

Home delivery and ghost kitchens set to lead the way forward

Albeit showing reluctance a few years ago, FSR owners have started to realise that home delivery/takeaway options are the ideal way to reach a wider and younger consumer base, along with greater profitability (for example, VAT is 10% as opposed to 20%). However, this trend did not see a notable trajectory until the COVID-19 pandemic hit in 2020.