Kamfar also has been trying to reinvent his Manhattan Bagel chain as more of a sandwich place after scooping it up out of bankruptcy in 1998. Besides bagels, the company now offers wrap-style sandwiches and gourmet coffee from its chain of specialty coffee shops.
"Coffee is definitely an important element," Kamfar said.
Analysts say the biggest blow to the bagel chains hasn't come from supermarkets or doughnut shops but from America's fast-growing java joints, which have been expanding their food offerings.
"People are saying, 'Give me the convenience that I want and the coffee that I want,' " restaurant consultant Sandelman said. "They think, 'A bagel is a bagel. How much different is it going to be if I get it from Starbucks or Noah's?' "
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Dollars to Doughnuts
Industry experts say customers are moving away from bagels and back to more decadent foods, including doughnuts, as people become less obsessed with counting grams of fat.