Crowded House : Too Many Cooks Spoil the Profit

Since Amy Pressman opened Old Town Bakery in Pasadena seven years ago, the number of restaurants near hers has increased tenfold. She has learned the pitfalls of being located in a trendy area, including the overwhelming competition from a constant stream of new restaurants and seeing the crowds drive away regular customers who would rather stay home than fight for a parking space. Pressman was interviewed by Karen Kaplan.

*

When I first opened the Old Town Bakery, there were about 13 restaurants in a 10-block radius. Now there are something like 134 establishments that serve beverages and something to eat. I wanted this area to grow, but I didn’t think it would get to this point.

Every new restaurant that opens takes business away from us. Even if it’s not that good, we’ll still lose some business because there are only so many bodies and people will want to try out the new places. It may only be a 1% drop, but with all of the new restaurants that are opening, it adds up.

The traffic in the area makes it more difficult to find parking and that just discourages people from coming here. It’s too much of a pain for someone to come here just to grab a muffin and a cup of coffee. We’ve got a lot of bodies in town, but they are not buyers. They just want to walk up and down the street and hang out. And they’re taking up parking spaces!

A lot of my customers just don’t like to come here anymore, especially on the weekends when it’s so crazy. There used to be something reverent about the old environment and the peacefulness of going into town. Now it’s much more intimidating.

On the weekends, we’re not busy for as long as we used to be, and our slow periods during the week are slower than before. It used to be standing room only in here. That’s never going to happen again.

We’ve had to really cut back on our labor, so our service isn’t as good anymore. We’ve also adjusted our hours so that we’re open earlier and we close later. But it hasn’t made that big of a difference.

I filed for bankruptcy last summer, and I just got out of it. I’ve managed not to get paid for two or three years. If I didn’t feel like it was a child of mine, I would have abandoned the bakery awhile ago.

It’s mostly the independently owned restaurants that are suffering. When the Cheesecake Factory moves in down the street, they aren’t going to have a problem. But the little Thai place on the corner that doesn’t have the visibility or exposure or marketing budget of a chain restaurant is going to have trouble.

I don’t necessarily think that being in a trendy area is negative. But you’ve got to have a limit on how many restaurants--and clothing stores and record stores--you can possibly support in a single community.

Now I’m opening some bakeries in the food courts at LAX, and I hope the exposure there will be good for the restaurant. I’ll also be opening another Old Town Bakery in Northridge in about a month.

I had hoped Old Town would become a popular area, but I didn’t anticipate these problems. I never would have thought about the parking issue. If I had to do it all over again, I wouldn’t start a restaurant here now.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

AT A GLANCE

Company name: Old Town Bakery

Founder/owner: Amy Pressman

Nature of business: Bakery and restaurant

Location: Pasadena

Year founded: 1989

No. of employees: 50

Annual sales: $1.5 million