Denny’s to Be Decimated in Wave of Closures, Half of Menu to Be Axed
Denny’s, the well-known American breakfast chain, is planning to close 150 of its restaurants as part of a drastic effort to address ongoing financial struggles. In a recent earnings call, company executives revealed that the closures will occur in two phases: 50 locations by the end of 2024 and an additional 100 by 2025, amounting to 10% of Denny’s total outlets. This decision is driven by numerous factors, including aging locations that are costly to upgrade, declining customer traffic, and inflationary pressures leading patrons to opt for cheaper menu items.
Additionally, Denny’s has experienced a dip in revenue due to fewer customers ordering from a reduced menu, which will be streamlined from 97 items to 46. The closure of 24-hour service at many locations since the pandemic has also contributed to reduced foot traffic, prompting a reevaluation of operating hours. As the chain’s stock has plummeted by 50% year-to-date, these measures aim to help Denny’s recover and enhance its overall performance in the competitive restaurant industry.
It’s been a rough year for Denny’s, the iconic American breakfast eatery chain, and a drastic plan to save the establishment was announced in a recent earnings call.
Perhaps, the most dramatic change: Denny’s has announced it will close 150 of its restaurants in two phases over the next year.
In a Tuesday earnings call, executives announced the first 50 restaurants would close by the end of 2024. The next 100 would close in 2025.
According to NPR, the closings amount to 10 percent of the company’s footprint.
A list of locations slated for closure has not yet been released, but it was stated that “underperforming” sites will be the focus of the purge.
The reasons for Denny’s ongoing issues are numerous.
Some of the locations are simply too old. Denny’s executives say this prevents affordable updating and remodeling.
Others have seen a sharp decrease in foot traffic — as many other businesses have similarly dealt with under the current (and strenuous) economic climate.
Some stores are simply seeing a drop in revenue from cash-strapped customers.
In a detail more indicative of the general state of the American economy than Denny’s itself, the chain reported some adult customers are ordering off the children’s menu to save money.
Another factor is a drop in traffic due to many locations ending 24-hours-a-day/7-days-a-week service.
Pandemic-related issues in 2020 largely halted the company’s iconic round-the-clock service, and nearly a quarter of Denny’s locations have not returned to the 24-hour model.
Denny’s corporate is now reconsidering its policy on operating hours.
In the past, franchises were required to remain open 24 hours a day.
While the trend is not unique to Denny’s, the company is struggling under the conditions. Year-to-date, the restaurant’s stock has dropped by 50 percent.
According to KTRK-TV, the mass closings are not the only change coming to Denny’s.
Most of the menu will also be cut, leaving only 46 of the original 97 items.
The change isn’t just aimed at easing overwhelmed customers. The company is hopeful that the halving of the menu will streamline how the kitchen operates.
If Denny’s is able to turn the ship around with some of these drastic changes, this American establishment could be seeing better days — and sunnier breakfasts — ahead.
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