Are Mom and Pop Restaurants a Thing of the Past

Do you like to dine in a big chain restaurant or a smaller independent restaurant? Obviously, it depends on the occasion. If you want a more personal, rich, and romantic dining experience, you will go for a meal at an independent restaurant. On the other hand, you will go to a chain restaurant if you need to get a quicker meal. How will you feel if you find out that your favorite "Mom and Pop" restaurant has closed down because it couldn't handle the competition from the new big chain restaurants that have been popping up all across town? This is a real problem for small restaurant owners and it appears that major restaurant chains like T.G.I.Friday, Ruby Tuesday, Cheesecake Factory, Applebee's, Chili's, and the like are taking over the restaurant scene in the United States.

Back in the 1970s, the market share for independent restaurants was about 85 percent. Things quickly changed in the 1980s when restaurant chain operators fine-tuned their business operations to seriously challenge the supremacy of independent restaurants. With the capital derived from public stock offerings, big chain restaurants were able to carve a sizeable advantage with superior product placement, big-scale advertising campaigns, promotional strategies, and economies of scale. To trample the competition, big chain restaurants expanded very quickly, spreading far and wide. According to a report by A Place of Hospitality, the domestic restaurant market share for restaurant chains has reached an astounding 88 percent.

It's well-known that big chain restaurants in the mid-priced sector have a big edge because of their consistency and brand recognition. When you go to a Cheesecake Factory restaurant in Arizona, you will discover that the food quality, menu, service, price, and decoration will be quite similar to a Cheesecake Factory restaurant in California. In this sense, customers know exactly what they are going to get as soon as they order but they are not quite sure when they go to a small privately-owned restaurant for the first time. Plus, big chain restaurants have big marketing budgets and they can afford to offer meals at more competitive prices because they enjoy various economies of scale. The Executive Vice president of Council of Independent Restaurants of America (CIRA) Philip Cook estimated that three to six independent restaurants would close down within one year to 18 months, after the opening of a major chain restaurant.

Does this mean that smaller privately-owned restaurants are going to be a thing of the past? Since it's still quite easy to start a restaurant business in America, the chances that privately owned restaurants will disappear altogether is quite slim. For one independent restaurant that folds, there may be another which is opening. On another note, independent restaurants are banding together through organizations like CIRA to fight against the big restaurant chains by pooling their resources together. To survive, independent restaurants have to promote their quality of food and service. Most diners will notice the difference in hospitality and the more wholesome menu. It's important for small private-owned restaurants to maintain these advantages because there are many people who want to enjoy a more fulfilling dining experience.