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It's lunchtime in Paris and the packed restaurant has neither check tablecloths nor carafes of red wine. It's a McDonald's and the French are lovin' it.
While rising prices and record low consumer confidence drive the French to throw their culinary pride to the wind and embrace le Big Mac, traditional bistros are hurting. About 3000 independent French restaurants filed for bankruptcy in the first half, a record 27 per cent higher than the same period a year earlier, according to Paris-based statistics office Insee.
"A hamburger patty and fries in a bistro around the corner from my office costs almost twice as much," said Alexandre Cavanel, a 27-year-old computer programmer, as he tucked into his 8 euro ($17.30) double cheeseburger with colleagues at a McDonald's in Paris' Opera district.
McDonald's, accused by Jose Bove - the activist farmer who ran last year for president - of serving "malbouffe," or junk food, said French revenue would increase 12 per cent this year.
In contrast, the fate of traditional French restaurants may worsen as a slumping economy drives more people to swap offerings such as duck "confit de canard" and "blanquette" of veal for hamburgers and fries, economists said.
France may have slipped into its first recession in more than 15 years in the third quarter, Insee said on October 3. Consumer spending will stagnate for the rest of 2008 as employment and the real estate market deteriorate and credit for new investment dries up, the statistics office said.
"Clearly, the current economic environment speaks in favour of cheaper products," said Dominique Barbet, an economist at BNP Paribas SA in Paris.
That trend is evident also in other industries. Retailers report consumers buying unbranded products and switching from supermarkets to discount chains.
Many French restaurateurs and cafe owners are concerned that rising prices and growing unemployment together with the global financial crisis will stop people from dining out.
"Fewer people eat in restaurants now, and when they do come they don't order like before," said Clara Vega, a manager of a central Paris cafe.
Falling consumer spending and a ban on smoking in cafes have eroded business, resulting in more restaurant bankruptcies in the wealthiest Paris neighbourhoods as well as in less affluent ones, court records show.
L'Instant de Plaisir, in the 12th arrondissement, met the same fate as Manhattan on the Champs Elysees and Le Consul II on the opulent Avenue Friedland in the past six months, according to the Tribunal de Commerce.
"We are disturbed by the rise in bankruptcy filings and fear the consequences for our businesses," Union des Metiers et des Industries de l'Hotelerie, a hotel and restaurant association, said last month.
"Restaurants, particularly cafes in rural areas, have seen a brutal decline in their business."
Meanwhile, France has cemented its position as the biggest earner outside the US for McDonald's, accounting for about 13 per cent of total sales.
Sales at the company's 1115 outlets in France will rise this year to a record 3.35 billion euro, McDonald's said this month. The company is opening 29 new restaurants in France this year.
At the McDonald's Opera restaurant, another patron said he enjoyed eating at McDonald's even though it made him feel a little guilty.
"I know it's malbouffe, but malbouffe can be good every now and then."
- BLOOMBERG