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More Diners Pull Up Seats As Local Restaurant Industry Continues to Grow

Posted on: Monday, 27 February 2006, 12:00 CST

By Jennifer Thomas, The Centre Daily Times, State College, Pa.

Feb. 26--STATE COLLEGE -- Diners have ever more options these days, as the number of restaurants in Centre County, both chains and independents, continues to grow.

But owners and managers of longtime establishments say they haven't been hurt by the increased competition, as each new addition to the market seems to gradually find its own niche.

"The more competition the better. Competition breeds business," said John Dimakopoulos, owner of two locations of The Waffle Shop. His restaurants along Atherton Street and West College Avenue cater to the breakfast and lunch crowd.

"That's part of growing in this town."

In 2005, at least four chain and four independent restaurants opened in the county. The pace doesn't seem to be slacking off in 2006. Four different restaurants -- The Shack, a second Home Delivery Pizza, Alto and the Italian chain restaurant Rotelli -- already are preparing to open. Two other franchises have also expressed interest in opening locations in the county.

In 2002 more than 4,400 people worked in nearly 200 full- and limited-service restaurants in the county, according to the state Center for Workforce Information and Analysis. The center projects that employment in the industry will grow 13.9 percent between 2000 and 2010.

It's part of a national trend. The National Restaurant Association expects sales nationally to increase 5.1 percent in 2006, to $511 billion -- a number that accounts for more than 70 billion meals or snacks.

With one of the lowest unemployment rates in the state, restaurants in the county are competing not only for customers but for employees, with many business offering higher wages and incentives such as free food, flexible hours and expanded benefits.

All restaurants, whether they be family owned, independent or part of a chain, face challenges, said Paul Kendeffy, co-owner of Zola New World Bistro. He is working with partner Dave Fonash to open a second venture, Alto, in Lemont.

The Centre Region, he said, is an appealing location for chains because of its proximity to Penn State, he said. But locally owned restaurants, he said, just have a different feel. And a lot of people want that atmosphere.

"The food, the service and the wine are reflective of the personalities in the business," he said. "Perhaps they feel they're eating more at home with their eating at a local place."

When T.G.I. Friday's opened next door to Dimakopoulos' Waffle Shop on Atherton Street in September, he said he saw an effect on his business -- but only for about a week.

With more than 35 years in the restaurant business, Dimakopoulos said the impact of chain restaurants on independent restaurants is minimal. In fact, he thinks chains help by offering options that bring additional customers into the marketplace.

"Next time they're going to choose my place, to compare," he said. "They cannot take all my customers. If I'm better to them, they will come back to me."

With more than 700 locations nationwide, there are advantages and disadvantages to being part of a chain such as T.G.I. Friday's, said beverage manager Dave LaSota.

There is structure, the extra financial backing for items such as advertising and product development and being able to offer a tried-and-true product associated with a name brand, he said.

"It's not trial and error," LaSota said. "The corporate entities give us what needs to be done and we implement it."

On the other hand, a bad experience at one restaurant -- bad service, a poorly prepared dish -- has the potential to taint the entire chain in a customer's mind, he said.

And changing an established practice, such as the times of happy hour, can be difficult for a restaurant that is part of a chain, he said. Competing with local specials such as 25-cent wing nights is just not feasible, he said.

Having variety is what makes the different establishments in town successful, he said.

"Everyone has their own tastes," he said. "I think there is room, but at what point (it becomes oversaturated) I don't know."

Things are competitive, he said, but in the end, people are loyal to the places they frequent, LaSota said.

"Everyone wants to go see the new kid on the block, and then people go back to what they like," he said.

That has kept The Tavern in business since 1948, said owner Pat Dougherty.

There's room for a lot of options in the State College market, he said, but he thinks the personal touches, such as homemade soups and sauces, play a big part in local establishments' success.

The ability to make and create their own menu, set hours and offer specials is important.

"I think we can respond very quickly to customers and their input," he said.

He said there is a shared customer base between all restaurants in town.

"I think there's days when what you're doing is cutting the pie into more pieces," Dougherty said. "Smaller pieces. Then there's other days when it's so busy that everybody's busy."

Jennifer Thomas can be reached at 231-4638.

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Copyright (c) 2006, The Centre Daily Times, State College, Pa.

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Source: Centre Daily Times (State College, Pa.)

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