Spartanburg-Based Denny’s Plans to Shutter 150 Restaurants for Business Boost
Hey there, folks! Here’s some interesting news from Spartanburg, South Carolina. Your local late-night breakfast spot, Denny’s, just shared that it’s going to close around 150 of its restaurants. Yep, you heard it right, and it’s all part of a strategy to breathe some life back into the brand’s sales, which haven’t exactly been on an uphill climb.
About half of these closures will go into action this very year, and the rest are set to function until 2025. The exact locations, however, remain undisclosed as of now. The unfortunate fact though, is that these closures make up around 10% of the total Denny’s locations.
The Reason for the Closures
Stephen Dunn, Denny’s chief global development officer, spoke about the decision at a recent investors meeting. He shared that some of these restaurants have simply outlived their prime locations. As a 70-year old brand, Denny’s really does have quite a few joints that have been around for many, many years.
Another point Dunn raised was the shift in customer traffic due to the pandemic. While other restaurants might have experienced a boost with people returning to dine out, Denny’s hasn’t seen the same rebound.
Now, folks, it’s no secret that dining out has been getting pricier. Inflation at restaurants is rocketing past grocery price inflation. So, it’s no surprise that many are choosing more budget-friendly options like cooking at home or heading to fast-casual spots or fast food chains. Because of these circumstances, Denny’s, which operates in the family dining category, has taken quite a hit since 2020.
The Silver Lining
However, not all their news is somber. In fact, there was quite an optimistic tone in the company’s statement before the meeting. Denny’s ECO, Kelli Valade, reflected on the brand’s ongoing investments and focus on value offering resulting in impressive third quarter sales results.
They even relaunched their fan-favorite value menu, with options ranging from $2-$4-$6-$8, and expanded their off-premises offerings with the introduction of their third virtual brand, Banda Burrito. Plus, they’ve seen some promising improvements in their restaurant Keke’s, thanks to some strategic marketing moves and an expanded alcohol program.
Another piece of tangible progress is their recent franchising and remodeling activity. During the last quarter, Denny’s opened two new franchised locations and refreshed the look of six others, including three that are company-owned.
Unfortunately, following the announcement of the closures, Denny’s shares took an 18% dive. Only time can tell how these changes will impact the brand’s future. To the Denny’s fans out there, stay hopeful! Big changes can often result in big rewards.
