Paris, Aug 14 - Groupe Flo, a French chain of restaurants controlled by Albert Frere, reported on Thursday a like-for-like decline in first half sales which it said was due to a 'collapse' in consumption in eateries.
It said it would step up marketing and slow its expansion plans to try and counter the impact.
First half sales were up 7.9 percent to 197.4 million euros ($294.3 million) but this was due to the opening of new restaurants and like-for-like sales were down 2.6 percent.
It said that the 'signs of degradation of comsumption' in the second quarter seemed to be part of a longer trend and in these 'difficult market conditions' it decided to slow openings and await better times in 2009.
Company officials were not available to say whether the fall in consumption -- mainly seen in dinners and celebrations and less in lunches -- was related to the economic situation or to the smoking ban in restaurants since the start of the year.
The French economy slowed 0.3 percent in the second quarter, according to offial data on Thursday, and the Economy Minister said the third quarter would not be good either.
In France, many employees take their lunches in restaurants often paying with employer subsidised meal tickets. But in the evening they pay themselves and in France the disposable income of families has declined due to rising food and fuel prices.
Flo added it would also not be able to compensate for the negative impact on its earnings from the scrapping of a system of lower social security payments for lower income staff.
Flo has brands ranging from the Brasserie Flo to the Hippopotamus beef restaurants and the Bistro Romain and Tablapizza Italian theme eateries as well as the Maitre Kanter Alsacian restaurants.
Flo shares closed up three percent at 5.69 euros on Thursday before the sales figures were released, and have lost 44 percent this year.
It has a market capitalisation of 240.6 million euros and is over 70 percent owned by GIB-Inno-BM, a part of CNP which is controlled by businessman Albert Frere, who has many investments in Belgium and France.