In an attempt to revitalize its business amid declining sales, Denny’s has announced the closure of 150 of its least profitable restaurants. This decision represents about 10% of the total Denny’s locations.
The company revealed that half of the closures will occur this year, with the remainder planned for 2025. While specific locations have not been disclosed, the closures aim to improve overall performance.
During an investor meeting, Stephen Dunn, Denny’s Executive Vice President and Chief Global Development Officer, pointed out that many of these restaurants may not be situated in optimal locations anymore. “Some of these outlets have been around for many decades,” Dunn added, noting that Denny’s has been a recognizable brand for over 70 years.
Dunn highlighted that shifts in customer traffic due to the pandemic also contributed to the closures, as some locations have not bounced back since the crisis.
On Tuesday, Denny’s reported its fifth consecutive quarter of year-over-year declines in same-store sales—reflecting sales at establishments that have been operating for at least one year. The company attributes this drop to rising restaurant inflation outpacing grocery price increases, making dining out less appealing for many consumers.
As families tighten their budgets, customers tend to favor fast-casual dining options like Chipotle or traditional fast-food chains over family dining establishments, which have seen the largest decline in customer traffic since 2020.
Despite these challenges, Denny’s highlighted some positive developments, including the success of its value menu, which has contributed to sales in the most recent quarter. Additionally, its delivery-only brand, Banda Burrito, is experiencing growth.
Following the news of the closures and ongoing sales struggles, shares in Denny’s Corp., located in Spartanburg, South Carolina, fell nearly 18% on Tuesday.
