Breaking: Denny’s Serves Up Major Shake-up with 150 Restaurant Closures Planned
In a dramatic turn of events, Denny’s Corporation has announced plans to shutter 150 underperforming restaurants by the end of 2025, marking a significant shift in the company’s strategy to boost its struggling sales performance.
The closure wave will hit in two phases, with half the locations closing their doors this year and the remaining shutdowns scheduled for 2025. While specific locations remain under wraps, this move will affect roughly 10% of Denny’s total restaurant portfolio.
Stephen Dunn, the company’s Executive Vice President and Chief Global Development Officer, points to outdated locations as a key factor behind the closures. “Many of these spots just aren’t working anymore,” he explains, noting that some restaurants have been serving customers for over seven decades.
The dining chain faces several challenges in today’s market:
- The same-store sales have declined for five consecutive quarters.
- Rising restaurant prices outpace grocery inflation.
- Chipotle and other fast-casual chains pose fierce competition.
- There has been a notable decrease in family dining patronage since 2020.
However, the House of Pancakes is not entirely devoid of optimism. The company sees some bright spots in its business strategy:
- Recent sales have increased thanks to a new value menu.
- The growing popularity of delivery-only options
- The success of their Banda Burrito brand
The pandemic has left lasting scars on the restaurant’s traffic patterns, with many locations still struggling to bounce back to pre-COVID levels. This has forced Denny’s to take a serious look at its nationwide presence and make tough decisions about which locations to keep running.
Wall Street’s reaction to the news was swift and severe. Denny’s stock took a nosedive, plunging almost 18% on Tuesday. The company, based in Spartanburg, South Carolina, must battle to persuade investors that these closures are part of a more robust comeback strategy.
The changes in consumer behavior have hit family dining establishments particularly hard. More customers are choosing to either eat at home or opt for faster, more casual dining experiences. This shift has forced Denny’s to adapt or face further decline in their market position.
For loyal customers wondering about their local Denny’s fate, the waiting game begins. The company hasn’t revealed which locations will close, leaving both employees and diners in suspense about the future of their neighborhood restaurants.
Looking ahead, Denny’s seems to be betting that a leaner operation will lead to a stronger future. While closing 150 locations is a bold move, it represents the company’s determination to adapt to changing times and consumer preferences in the highly competitive restaurant industry.
Will this strategic decision help Denny’s regain its former glory? Time will tell, but one thing is certain: as the American dining landscape continues to evolve, even longstanding institutions must adapt to stay relevant.