Recent Study: Full-Service Restaurants in France

Several socioeconomic factors impeded value sales in 2013, amongst which the most significant was the contraction in demand resulting from the declining purchasing power of French households. The 2012-2013 increase of 10% in income tax drastically affected the disposable incomes of French consumers and slowed down visits to restaurants during the first three quarters of 2013. A slight recovery was noted in the final quarter – mainly seasonal and linked to year-end celebrations – but was insufficient to counter the decline of earlier months. French households continued to resort to more economical foodservice alternatives, notably fast food, "distri-ration", street stalls/kiosks, lunch boxes from home and snacking substitutes, resulting in a loss of some 10 million transactions for full-service restaurants year-on-year.

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Competitive Landscape

In 2013 Buffalo Grill and its franchisees accounted for the highest value sales in full-service restaurants, with a 2% share of sales in GBO terms. Despite a decline of 5% in the network’s value sales in 2013, the Buffalo Grill brand in France remains strongly established on quality, affordability and service excellence. Besides, the company was able to better contain the structural decline in the rate of visits to full-service restaurants by offering economy main dishes at less than €10, such as the most recent Steak 3 poivres (Three pepper steak). Another important factor behind the company’s leadership is its wide nationwide coverage of 228 outlets spread throughout France. By contrast, its closest similar-themed competitor Courtepaille had a lower nationwide coverage of 186 units.

Industry Prospects

The five year outlook for full-service restaurants is likely to be bleak. Faced with a highly thrifty consumer base and a structural decline in the number of visits, players will also be faced with a new intermediate foodservice VAT rate of 10% from January 2014 (the same rate was 5.5% back in 2011, and was raised to 7% in 2012). Trade sources expect 2014 to be a catastrophic year for full-service restaurants, and predict a further volume transfer to fast food and other snacking substitutes. In addition to the higher intermediate VAT rate, players will also have to bear heavy expenses in order to conform with mandatory norms, such as the "Handicap" law on the access for persons with reduced mobility, which is set to come into full effect as from 1 January 2015. A negative value CAGR of 2% is expected over the forecast period at constant 2013 prices.

Report Overview

Discover the latest market trends and uncover sources of future market growth for the Full-Service Restaurants industry in France with research from Euromonitor's team of in-country analysts.

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