A number of years ago, I was working with a diner owner in Deptford, New Jersey (Exit 3 on the New Jersey Turnpike). On my way to that diner, I passed by The Phily Diner and Sports Bar in Runnamede, New Jersey. When I first went by the diner, I could not believe what I was seeing. Here was a 1950’s themed diner on one side and on the other was an inside/outside sports bar. I had never seen that concept before and was intrigued enough to stop in and have lunch.
In the years of working with a number of diner owners who had liquor licenses, gross sales from liquor accounted for no more than 5-10% of total revenues? Most restaurants have 25-40% of liquor sales to total revenues, which has a much higher profit margin as compared to food sales.
Diner owners have weighed the sale of the liquor license to generate additional capital or have created outside patio’s to generate additional liquor sales. All have tried to increase revenues through liquor sales, but none have succeeded in dramatically increasing liquor sales to leverage the cost of a license.
I met with Petro Kontos, co-owner of the Phily Diner and Sports Bar recently and we discussed his business model. Petro came to this country from Greece in the 70’s and work in diners in all capacities. In 1981 he came to the fore-runner of the Phily Diner for Thanksgiving Diner and loved the location. He ended up purchasing the diner putting down $10,000 and steadily made improvements in the years to come.
Next to the diner was a local watering hole named “Marlins Bar”. The President of a local bank was in the process of foreclosing on the bar and contacted Petro to see if he was interested in possible purchasing. Petro purchase the bar, but was more interested in liquor license to generate additional revenues for the diner.
As the years went on, he additionally purchased a barbershop to expand his diner, and then finally he purchased a gas station that was on the corner of the property which was the last piece of the puzzle. The gas station had contamination from ruptured underground gas tanks, and it was purchase once all the contamination issues were eliminated.
Petro, like other diner owners wanted to generate additional liquor sales. He turned to Bill Kantos, owner of United Diner Construction in Philadelphia. Bill has been in the Diner Construction business all his life and is considered the “Rembrandt” of Diner Design. For people in Northern New Jersey, United Diner built “American Dream Diner” located on Route 303 in Orangeburg, New York just before the Palisades Shopping Mall. If you haven’t been to the diner, it’s worth the trip just to see his incredible design.
In speaking to Bill, more and more diners, specifically in Southern New Jersey are creating a different atmosphere and entertainment experience for their patrons. Diners are becoming more Café’ dining experience with the customers staying longer and ordering more per table. The Sports Bar theme is catching on in more and more established diners to generate additional liquor sales and different menus from the typical diner fare. In Phily’s Diner and Sports Bar, they have two different kitchens for the diner and sports bar to maximize efficiency and maintain consistent quality.
In addition to Phily’s Diner and Sports Bar, other diners in South Jersey such as Hollywood Café in Woodbury Heights and Peter’s Diner in Williamstown have create similar experiences for their patrons.
Finally, that diner I met with in Deptford, New Jersey. Well they brought in a new partner and change the name to Seven Stars. By the way, it’s a diner and sports bar. Could it be that Philadelphia Sports Fans demand more than New York Sports Fans? What do you know—— another reason for our continued rivalry!