Paris, March 9 - Groupe Flo , a French chain of restaurants controlled by Belgian businessman Albert Frere, will cut staff by 20 to 25 percent by the end of 2009, Chairman Dominique Giraudier said on Friday.
The group reported a like-for-like slump in full-year sales, because of a "brutal collapse in consumption" in 2008.
Full-year sales were down 4.6 percent in 2008 when excluding the opening of new restaurants, said Giraudier.
This should be achieved by "not replacing departing staff and increasing the proportion of part-time workers from 10 to 30 percent" added Giraudier at the annual results conference.
Groupe Flo has approximately 6,500 staff in 267 restaurants in France and other countries including China, Spain, the Netherlands and North Africa.
It opened 35 new restaurants and franchises in 2008.
Giraudier said Flo will stop developing its Italian-themed Bistro Romain restaurants, the most affected brand because of a "failed upgrading", but will not shut down branches.
Instead, it will convert them to other group's brands like Hippopotamus beef restaurants, Brasseries Flo or Maitre Kanter Alsacian eateries.
The fall in consumption is due to "irrational and anxious behaviour from customers who stop eating out during the week but can sometimes spend more during week-ends and just after pay day", added Flo.
Rising inflation during the first half of 2008 and the financial crisis had a psychological effect on Groupe Flo's customers, who shifted from traditional sit-down restaurants to fast-food and sandwich shops.
The number of customers in the "sit-down restaurant" sector was down 2.2 percent in France in 2008, said a study from NPD analysts published on Feb. 25.
These figures were up 1.4 percent in the fast-food sector.
Groupe Flo said it will address this situation "aggressively" by developing take-away food and launching new discounts for families and students. The group added it has changed its priority from "expansion" to "cash flow generation".
Groupe Flo shares were down 4.35 percent at 2.2 euros late on Friday. It has a market capitalisation of 175.4 million euros ($221.8 million) and is 70 percent-owned by GIB-Inno-BM, a part of CNP which is controlled by businessman Albert Frere. ($1=.7909 Euro)