Competitors don’t put diners out of business: Consumers Do

One of my friends lamented the closing of the Capital City Diner in the District on facebook.

I haven’t been there, and from what the DCist says, it seemed like a nice place. And, for all intents and purposes, I love diners. I have since college — Courtesy Diner, Tiffany’s, Uncle Bill’s — you name the place in St. Louis, diners rule.

This goes to the heart of the “buy local” debate and “big guy vs. little guy” debate. Why do businesses close?

The owner cites rising input costs, which makes sense because of changes in commodity prices. Smaller entities have a harder time weathering those fluctuations than bigger businesses because they lack economy of scale. Often times they also have a harder time competing on price.

Apparently, a Denny’s opened up down the street, and Denny’s had an easier time dealing with rising prices.

In the end, consumers chose Denny’s. People want to blame Denny’s, and frankly, it’s not Denny’s fault — it’s the consumers’ “fault.”

Because at the end of the day, the consumers voted with their dollars and Denny’s won.

(Not to sound like a hater,  I hope that they “reformat” and are successful. I don’t wish any ill will on any business because of its size or scope. But we need to be honest who is responsible for closing local favorites — sometimes they are not favorite enough.)

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