Land and rent used to be cheaper, and a lot of people come through the door. The margins on a lot of diner food, like eggs, ground beef, and coffee and fried potatoes, were at least historically fairly high. People in NYC also historically ate out a lot.

I think longtime NYC restaurant owners often love being a community hub, particularly if they’re first generation Americans, so they’re not thinking of how to squeeze the customers or follow the latest fads.

A lot of stereotypical “ethnically owned” businesses in NYC also have their own supply chains. It’s very possible they are or were buying from Greek-American wholesalers who are effectively buying in bulk for diners across the city.

My impression in general is also that people who’ve worked in the NYC food business for a while in general know their preferred vendors to call for any particular thing, from whole chickens to pest control, and that if you tried to compete with them by finding vendors on Yelp or whatever without those relationships you would be at a complete disadvantage.