|edwin m. epstein
|Posted on Monday, December 18, 2006 - 12:35 pm:
I am curious about the factors that caused Horn and Hardart to go out of business: what it that it offered low priced food with, presumably, low profit margins per item and its automat/shop locations were quite often in expensive real estate locations made it economically untenable? Is there a good business history of the birth, hey-day and demise of H & H? These questions are from a long-time Californian born and raised in Philadelphia where the Automat was an icon.
|Dan Booth Cohen
|Posted on Saturday, January 06, 2007 - 10:57 am:
H&H went out of business in New York because the leases on the retail spaces were worth far more than the profits from operating the restaurants. In this sense H&H didn't go out of business, they converted their retal spaces to fast-food restaurants, such as Burger King.
|Lee from Bucks County
|Posted on Monday, February 26, 2007 - 1:00 pm:
Per the question of why H&H went out of business:
H&H went out of business in both NYC and Phila for a variety of reasons, which are discussed in the Automat book. In summary, the world changed in many ways that no longer fit H&H's style and mode of operation.
Around the early 1970s, people got tired of the H&H offerings and ambiance, more patrons wanted more eclectic foods and settings. H&H was seen as stodgy and old fashioned. Families who once took their kids to H&H found fast food easier and cheaper (regardless of the nutrition issue). A new generation of people didn't share their parents' excitement of the Automat and H&H food. Perhaps they once did, but were ready to move on to new and different offerings. Theme restaurants became fashionable.
While we may not like to say this, a young couple wouldn't be interested in dining in a room full of elderly seniors, including the servers. The last Phila restaurant, Bala Cynwyd, had a huge loyal senior following, but not much else.
At the same time, costs were rising more than revenues were.
In some places, H&H tried remodeling some outlets but it didn't work out very well.
Basically, a viscious downward spiral took place. As patronage fell, the restaurants became run-down, populated more by less-attractive people which in turn discouraged patronage. As revenues fell, it was harder to maintain quality and operations and keep up the buildings.
H&H wasn't the only chain. In Philadelphia, there were also Linton's and Hot Shoppes. Baked products were sold by Hanscom's. All of those companies suffered in that time. (Linton's went into institutional catering.)