The economics of diners in New York City

They are disappearing, though still with a cluster in Queens, here is one trouble they are having:

It costs as much as $4 million to open a new diner these days…compared to $500,000 for a higher-end restaurant, because diners require so much storage space for the inventory that their large menus require.

The full article, by Aaron Elstein, is here, it has numerous interesting bits.

Comments

Why no comments on this important topic? I expect to see more.

Notice TC could have included a clever pun--but did not--by saying 'it has numerous interesting TITbits' rather than just 'bits'. But that would have been too clever by half in a food article, and TC, a chess master, anticipated the audience reaction. It reminds me of when reviewing games grandmasters play, sometimes they don't make the obvious move, since their opponent anticipates this obvious move, but instead make another (and also good) move that's unexpected.

Ray, it's so lame when you post a placeholder comment to establish firsties, then followup a couple minutes later with another comment actually giving your thoughts. Either do it right the first time or don't do it.

@MT - no, I respectfully disagree. You will note even by your own definition, my 3:01 AM second post was still first. I am first always and forever. And you are late to bed. Run along, to bed little man (it's tomorrow for me, being in the Philippines).

That is from the always excrement Ray Lopez.

Self-unrecommending.

Any takers for bets between Ray Lopez and Thomas?

"@MT – no, I respectfully disagree"

No, it's definitely lame.

As you yourself pointed out, if you hadn't posted the "I'm first, look at me, I need attention" comment, you would have still have had the first comment. And you wouldn't have looked nearly as needy and starved for intellectual attention.

Don't you mean "tidbits"...

You are one weird dude Ray.

He's just lonely, we're his only outlet.

It would seem that diners should have a simpler menu. I would expect that the problems with compliance are also a big driver of those costs. It is not easy to keep up with the various government demands these days.

And of course, as the comments point out, rent.

Of course, it's regulations! Of course that does nothing at all to explain why diners have receded while other restaurants have proliferated.

He said they were a factor, Jan, calm down. And yes, for certain types of businesses, smaller businesses with less capital, regulatory burden is a major factor.

Doing anything is harder for any business with "less capital". Should vendors charge less to small businesses, because of capital and all?

Why do you think a diner requires low capital??

And why do you think that capital gains making starting a business requires a lot more capital is a bad thing??

If you buy the land and building in 1970 for $350,000, isn't it a great thing that the capital is now priced at $3.5 million??

So what if you must spend $3.5 million just to buy the fixed capital and another $500,000 to buy inventory, it just shows how wonderful capital gains are because its the way to create wealth.

Won't it be a great thing if starting a diner in 40 years costs $40 million because capital gains inflates the price of the capital needed to $35 million?

I had the same thought. Cut the menu down to just breakfast and lunch basics. Serve the same things for dinner as for lunch - burgers and sandwiches.

You have defined the replacement for all the diners:
McDonalds
Burger King
Dunkin Donuts
Pizza Hut
Taco Bell
Starbucks

Diners are clearly inferior to the superior product of MBAs advised by economists who preach slashing labor costs and increasing production rates by specialization and eliminating low margin options and trademark monopoly to increase profits to generate capital gains.

With capital gains to create wealth, you also create barriers to entry by making the capital for competitors stuck in the horse and buggy era businesses too expensive for the modern profit focused jet plane.

Per the article, diners have higher up-front costs and higher margins. They should thrive in a low-interest environment.

Article points out a gaping hole in the methodology: classifying restaurant type by the restaurant name.

9 minutes is really fast for a roast, they must be roasting very hot through the whole cycle. I roast hot until smoke appears (about 9 or 10 minutes in, obviously not nearly as hot as they do), then cut the flame way down and roast until I see copious smoke from second crack. My roasts are usually 15-18 minutes. I'm not saying you can't make good coffee doing it their way, but I'm sure the coffee would be much better if they weren't rushing it so much. Considering their large 522-pound batch size -- presumably processed by a few roasters in parallel, not one big one -- I wonder how even their roast is. It sounds like their process has been optimized strictly for production at the expense of other features, such as roast uniformity,

Why god invented mashed potatoes and gravy, to add to the dish. Nobody going to a diner gives a shit how even their roast is.

This is all wrong. The diners are still all over the place in lower Manhattan. They are not more expensive to open than other corner restaurants and they are not obliged to have large menus or storage. This guy seems to have extrapolated from the business model of one large high-end diner in Queens, which is nothing like the typical little corner diner in lower Manhattan.

Of course times change and competition for customers forces diners to adapt to new tastes. Most NYC diners frankly are crap and need to change. Veselka is doing great.

The large menu filled with large portions of mediocre food along with a certain aesthetic and surly waiters *defines* the diner.

What Manhattan do you live in? Yes many still exist but they are definitely disappearing. I wouldn't call Veselka a diner. I'd consider it a special case.

Re: Veselka, that's my point that it's a special case. It's a Ukrainian diner, and it works.

Re: diners disappearing, sure, very gradually. It's a matter of people not liking them enough, not of them being too expensive to operate.

Re: large menu defines diner - if so then there aren't many true diners in NYC

Pro tip: There's more to NYC than Manhattan south of 96th street (and no, I don't mean Williamsburg and Park Slope).

Open 24/7, the owner hasn't gone on vacation for 20 years........could it be that the pool of poor people that has no option but work 16 hours a day or the night shift is getting smaller? If that's the case, people should be celebrating.

Also, the median age of people in NYC has been going up since 1970. None of the Nighthawks in Edward Hopper painting seems to be 65 or older. 24/7 business will keep declining.

Yes we should celebrate diners closing because the owners work too hard and now they're unemployed or on welfare.

Why don't diners copy Chinese restaurants: a menu as long as the phone book but there's really only one item on the menu but with many different names and a few different sauces. I've always been confounded by people who are drawn to Chinese restaurants because of the variety of the offerings. Variety? They don't notice that every item on the menu tastes the same.

You're going to the wrong Chinese restaurants. Maybe Tyler has some advice for that problem.

I live in NYC and find the quality of the average diner abysmally low. Even the supposedly "good" and "recommended" ones have not been good.

BTW, if you want the best pastrami sandwich, ever, try Harry & Ida's, on Ave. A and 12th Street. The shop is tiny and the price is not outrageous but certainly higher than much nearby ethnic food.

"Pastrami with buttermilk fermented cucumbers, dill, and anchovy-Meyer-lemon mustard."

Do you even Jew, bro?

@asdfd Are you suggesting the only way to serve pastrami is kosher? In its roots it's actually more of a regional technique then specific to reliogen most of the time done with non-beef cuts of meat... So in that thinking are all pastrami made of beef instead of goose breast sacraligious as well? I'm confused.

In NYC pastrami isn't a Romanian or Turkish dish. It's Jewish. Adding that frou-frou crap to a pastrami sandwich is like goyishe bagel places that have sun-dried tomato bagels they serve with guacamole or something.

I think back to the scene in Annie Hall where Annie orders Pastrami on white bread with mayo.

Comments for this post are closed