Retail Refugees

Changing Priorities or Economic Pinch?: The Decline of the Brasserie
October 14, 2008, 2:22 pm
Filed under: Uncategorized | Tags: , , , ,

In the Business Week Europe section online, an interesting casualty of the economic crisis was brought to light- the hallowed tradition of the classic French brasserie.  In the first half of 2008 nearly 3,000 restaurants and cafés have gone bankrupt—a 30 percent increase from the same period last year.

Restauranteurs have mixed opinions as to the reason in the slow business.  Some say that the younger generation simply does not care for the traditional French style of eating; “Younger French people today don’t understand or care about food. They are happy to gobble a sandwich or chips, rather than go to a restaurant. They will spend a lot of money going to a nightclub but not to eat a good meal. They have the most sophisticated kinds of mobile telephone but they have no idea what a courgette is. They know all about the Internet but they don’t know where to start to eat a fish.”  Others point to the decline in American tourists who typically fill the white-tablecloths on a regular basis.  Some point the finger at the “strictly” enforced (by French standards) to the smoking ban which was enforced as of February.

The French and foodie blogosphere however, has reacted to this news by accusing restauranteurs of “spitting in their own soup” by taking advantage of another European fact of life—the euro. French restaurant prices had risen out of proportion to inflation, they complain, because owners have exploited the switch from francs to euros.

“With high prices, rude waiters and no cigarettes allowed… people prefer to invite a few friends to eat and drink at home. It’s cheaper and more fun,” one contributor wrote according to Business Week.

Personally, I feel it is a combination of all of these influences.  The fact remains however, that by the time the global economy and dollar are back to their normal levels, consumers will be trained to be careful, and will continue to be careful about their discretionary spending.  As a result these restaurateurs will have to conform to a new dynamic regarding their clients (regular and special).

Retailers should take these statistics and lessons to heart and make decisions now that are sustainable.  Though the first example of this is in restaurants (and not retail fortunately), the bottom line is that consumers are definitely sensitive to the financial changes, and though the last few years have been full of high prices, this will not be the same for the current and upcoming periods.


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