Denny’s, a popular diner chain in the US, is set to close 150 of its locations over the next year. The closures were announced during an earnings call, with 50 locations expected to shut down by the end of 2024, and the remaining 100 to follow in 2025, according to CNN.
The specific locations of the restaurants that will be closing have not been disclosed yet, but this decision will affect approximately a tenth of all Denny’s outlets in the country. After the closures, Denny’s will have a total of 1,375 restaurants remaining nationwide.
Steve Dunn, the executive vice president and chief global development officer for Denny’s, mentioned that the closures will target underperforming restaurants that are either too old to renovate or are no longer profitable for the company. This move comes as Denny’s shares dropped by 17 percent following earnings that fell short of analysts’ expectations, leading to a 50 percent decrease in stock value for the year.
Apart from the closures, Denny’s is planning to streamline its menu options by reducing the number of items from 97 to 46. The chain also noticed a trend of financially strained adults ordering from the kids’ menu to save money.
Denny’s is famous for its 24/7 operating hours but has started to adjust this policy due to changing customer trends, exacerbated by the impact of the Covid-19 pandemic. Dunn acknowledged that maintaining round-the-clock service is no longer sustainable for some locations, reflecting a broader industry contraction in operating hours.
This move by Denny’s follows a series of similar actions by fast-casual restaurant chains such as Olive Garden and Red Lobster, which faced financial challenges earlier this year. Red Lobster, in particular, filed for bankruptcy in May following losses incurred by a popular but costly promotion.
In conclusion, Denny’s decision to close 150 locations and make operational changes reflects the evolving landscape of the restaurant industry, influenced by shifting consumer habits and economic challenges. This strategic move aims to ensure the long-term sustainability of the brand amidst a competitive market.