Approximately 20 years ago, on March 30, 1993, a landmark Buffalo restaurant closed its doors for good. The lessons of its demise should not be lost on today’s local businesses.
Your Host started life as a hot dog stand in 1944 and from this humble beginning Alfred Durrenberger Jr. and Ross Wesson grew the fledgling enterprise to 40 locations. Calling Your Host a restaurant makes it seem more upscale than it actually was. In reality, it was a diner along the lines of both the fabled Route 66 diners and mythical small-town diners of the Eisenhower era. If Edward Hopper had chosen to base his iconic painting “Nighthawks” in Buffalo, he would have used Your Host as the model.
The food was a step above McDonald’s and Red Barn (another casualty of the fast-food/diner wars) and Your Host eventually outlasted its main local competitor, Deco Restaurants, which went out of business in 1979. Any teenager with a car, or who had a friend with a car, knew the nearest Your Host location. On Friday nights and weekends in the 1960s and 1970s, when the drinking age was 18 and bars stayed open until 4 a.m., they were drawn like the proverbial moth to the flame to Cleve-Hill Plaza, the Hamburg Shopping Center and even to Dunkirk and Rochester. Once crammed into the tiny booths, the crowds of semi-sober young people scarfed down greasy burgers and french fries soaked in ketchup or gravy.
Times change, and in many ways Your Host failed to change with them, but the seminal reasons for the restaurant’s demise are eerily similar to what many local businesses face today. Some of the reasons in 1993 for the closure of Your Host were a faltering economy, escalating costs, a failure to modernize and update its stores and an increase in competition from national chains. Small businesses still face these same challenges in 2013.
Although the economy has recovered somewhat since it went into a free-fall in 2008, the unemployment rate and the number of workers who have given up looking for work remains remarkably high. Household income has flat-lined and consumer confidence is low. These factors have stunted the growth of small business, and it does not appear the economy will fully recover in the near term.
Small businesses are particularly impacted whenever government issues new mandates. Costs of the new health care law, called Obamacare by many, are gradually coming into focus and are not good news for small businesses. They may have to lay off full-time workers and replace them with part-time workers to prevent paying insurance costs they can’t afford. The increase in the minimum wage that New York State recently passed will not only hurt small businesses’s ability to survive but may also cause higher unemployment among teens and minorities. In New York City, billionaire Mayor Michael Bloomberg’s strangely Orwellian attempt at social engineering is driving up costs for small business.
Sears and Kmart are examples of what happens to companies with poor business plans and older, run-down stores. The mom-and-pop operations in your village or down the street need to remember that first impressions are most often the only impression customers will remember. Clean and welcoming stores make customers want to come back. Run-down and dirty stores cause them to flee.
The competitive environment has become more treacherous as national chains such as Walmart, Denny’s and McDonald’s expand into smaller and smaller geographic areas. Online tax-free purchases hurt local brick-and-mortar stores by stealing their customers or squeezing their profit margins. Locally Tops has taken a preventative step by opening Orchard Fresh in Orchard Park. This store, which specializes in upscale, gourmet foods and sundries, is partially an effort to stop other chains from competing in Western New York.
Like the television show “Cheers,” at Your Host it seemed everybody knew your name. Your Host was local people serving and supporting local people. While there are memories left behind by Your Host there are also business lessons. Small business needs less government interference and fewer mandates. What it needs from government is less of the economic illiteracy we see from the current state and federal administration and a more pro-growth agenda. Small businesses need to continue to evolve, adapt, modernize and adopt new technology in the face of ever-growing competition, both nationally and online. Ultimately, small local businesses desperately need our support.
Remy C. Orffeo, a resident of Orchard Park, is a professor of business administration at Erie Community College South Campus and a freelance writer who has published business case studies in “Decision Making in Business.”