Cafes are hit hard by growing economic misery in France

Average of two per day close as society adapts

SAULIEU, France - Nathalie Guerin, 35, opened Le Festi'Val bar and cafe two years ago full of high hopes, after working at this little Burgundy town's main competition, the Cafe du Nord. But beginning this summer, business started to droop, and in October, she said, "it's been in free fall."

"Now there's no one," she said, standing in a somber room with a few sad holiday decorations, an idle pool table, and one young man playing a video game.

"People fear the future, and now with the banking crisis, they are even more afraid," she said, her eyes red. "They buy a bottle at the supermarket and they drink it at home."

Guerin's plight is being replicated all over France, as traditional cafes and bars suffer and even close, hit by changing attitudes, habits, and a poor economic climate. In 1960, France had 200,000 cafes, said Bernard Quartier, president of the National Federation of Cafes, Brasseries, and Discotheques. Now it has fewer than 41,500, with an average of two closing every day.

The number of bankruptcies filed by cafe bars in the first six months of 2008 rose 56 percent over the same period a year ago, according to a study by Euler Hermes SFAC, a large credit insurance company. No reliable figures are available for the latter part of this year, when an economic slowdown was accelerated by the general financial crisis, drop in consumer confidence, and the quick tightening of credit.

But the impression is that business is bad and getting worse, with people and companies cutting back on discretionary spending and entertainment budgets. And that compounds longer-term trends stemming from changes in how people live and growing health concerns.

"The bar of a cafe is the parliament of the people," as Honore de Balzac wrote, but it is being less frequently visited these days, especially by the young.

Not only are the French spending less, and drinking less, cutting down on the intensity of the debates, but on Jan. 1, France extended its smoking ban to bars, cafes, and restaurants.

Guerin is trying to sell her cafe, but has had only one nibble in this lovely town of some 3,000 people, much visited by tourists, where the renowned hotel-restaurant Relais Bernard Loiseau is just down the street.

Jean-Louis Humbert of the Federation of Cafes, Brasseries, and Discotheques is blunt about Guerin's chances. "It's finished for her," he said.

Daniel Perrey, 57, owner of the Cafe du Crucifix in Crimolois, blamed social change.

People are drinking and spending less, and those who drink are wary of the police, who hover nearby to test drivers' sobriety. "Sadly, it is the end to a way of life," Perrey said. "The culture is changing, and we feel it."