Around 25 restaurants close every day in France amid high operating costs and low profitability

Around 25 restaurants are closing every day in France as the sector faces high operating costs and low profitability, according to Thierry Marx, president of the Union of Hotel Trades and Industries.

Marx, a Michelin-starred chef, said employer contributions are placing a heavy burden on jobs and wages across France’s hospitality and restaurant industry, which employs approximately 1.6 million people.

Restaurant insolvency proceedings, including restructuring, liquidation and safeguard procedures, rose 6.4% in the second quarter, according to Marx.

The sector’s average profitability stands at just 2% to 3%, leaving businesses with little capacity to invest. Marx also warned against increasing the value-added tax (VAT), which currently stands at 10% for traditional restaurants and 5.5% for fast-food establishments.

He said fast food has surpassed traditional restaurants in the past two years, warning that France is undergoing a gradual “de-gastronomization” as independent chef-led restaurants give way to chains.

Marx also noted that restaurant activity in the Gironde and Landes regions fell by 40% following severe wildfires and called for support to help affected businesses recover.