===Both my mom and dad own a coffee shop here in the Pocono's, Pa... ... We are trying to find ways to increase our business, but sadly there has been a recent development on our street (we are located on a main road) and there is now a Panera Bread and a Starbucks about 4 miles from us... ...A little about "Dale's Cafe": We serve lunch and dinner, and are open from 11-8 daily.===
Both places are meant as spots where you can sit around and do nothing. No restaurant can work that way. You want a place where you can say "Hurry up and eat."
I have a disconnect when you say that you are a coffee shop, but you open @11:00 AM. No coffee shop opens at 11 AM. Closing at 8:00 PM? Seems kinda early. Does the town close up around that time? What time does it wake up? Are there places to go for a -great- breakfast?
====..... Homemade soups, chili, salads, panini's, wraps, and egg sandwiches basically consist of our menu, plus some italian dishes for our dinners. ===
Now here is where I may sound kind of cold, your menu is boring. Paninis and wraps are yesterday's news. How many egg sandwiches do you sell after 11:00?
I like this review for the All-Star Sandwich Bar. They proudly proclaim that they are 'wrap free' since they opened. Also, look at those sandwiches, your competition isn't making food like that.... and I think that may be true for you.
You need to create a menu that is so unique that you become a destination for a one-of-a-kind sandwich or lunch in general.
http://www.roadfood.com/Reviews/Writeup.aspx?ReviewID=4223&RefID=4282 As for Italian dinners, I think that it may also be a disconnect for your customers, as your lunch menu doesn't sound Italian. Most Italian restaurants do not end with the name 'Cafe'. Do you sell beer and wine? What is the competition for Italian food?
===My dad always makes sure to have the highest quality foods offered at the lowest possible prices, and I'd say our coffee is amazing.===
You need to promote that quality, make people aware of that fact. Create a new and exciting menu that stays within the concept of a small cafe. Have a sign in the window that proclaims your coffee is 'Better than the Other Guys'. That is a start.
It's great that you keep prices low, but maybe people don't think that you are usng quality at the price. Don't be shy to consider raising prices a little to justify your quality. People will pay for it, especially if there are generous portions of flavorful food that is unique to your place.
=== My dad is ALWAYS there, he practically lives there,====
This may be a small problem too. It is tough when you are so dedicated to working that you don't take time off to step back. They need to look at the whole picture at the place, but more important, at other places. What are the other guys doing? I see this happen frequently.
You need to get him to this site, have him look up Diners or Cafes. There may be something that could interest or inspire him and see what makes other places succesful. Right now, I bet he is getting tired.
===... he and my mom have put so much energy into the place, making it look spectacular. We also display local artwork which can be purchased and is rotated monthly, which many people like to come and look at.===
This is where they may have a great strong point. If the place looks spectacular, that is a big plus. Having local art on display is something that demonstrates you're part of the community, and support it. You want them to support you too.
Do you contact the local paper with info on the changing art exhibits?
You say that people come in to look at the art. Do they stay to eat, or leave after looking at the menu? You need to make them stay. Either way, in the back of my head I see a week-end art show outside of your place.
There are other responses with the suggestion of doing breakfast. I am of that camp too, but I like doing breakfast and lunch. You can close at 3:00PM and still see the blue sky outside. When was the last time they saw the sun set?
One other thing. I have been cooking for over 30 years and I like two TV shows that keep me motivated and introspective too. These shows keep me fresh.
I like Ramsey's Kitchen Nightmares. Either on BBC America of Fox, both versions are interesting.
That show is where he comes to places that are having problems such as yours and gets them back to and sometimes exceding prior levels of business.
The other show is 'Diners, Drive-Ins and Dives' on the Food Channel. I love the food and places that he goes to in each episode. It is similar to what this site is all about. First and foremost it is the food, but a great atmosphere helps. It may inspire dad to create something unique too.
Good luck, do come back here as we are great at giving free advice. Sometimes it is even good advice with the right answer.....
mark
PS. Right now, business is slow for almost all restaurants in the nation. Don't be discouraged.