The iconic diner chain Denny's has announced it will be closing 150 of its locations by the end of next year. This decision comes as the company faces declining revenue and shifts in consumer behavior. Known for its 24/7 service and a diverse menu, Denny's has been a staple in American dining for over 71 years.
According to Executive Vice President Steve Dunn, the company is targeting underperforming locations that are financially strained. Many of these restaurants are too old to be remodeled or are situated in less profitable areas. The decision to close these locations reflects broader challenges faced by the chain and the restaurant industry as a whole, including rising inflation and changing consumer preferences.
In the latest quarterly report, Denny's total operating revenue was $111 million, down from $114 million in the previous year. The operating income also saw a decline, dropping from $14 million to $11 million. Despite these challenges, Denny's CEO Kelli Valade expressed a commitment to ongoing brand investments and maintaining value for customers, although the company did not meet analyst expectations.
Denny's stock fell 17% to $5.47 following the announcement of the closures. In addition to Denny's, the company owns Keke's, a smaller restaurant chain with around 60 locations primarily in Florida. The current economic landscape has been difficult for many restaurant chains, with notable examples including Red Lobster and Rubio's Coastal Grill, both of which have faced bankruptcy challenges this year.
As part of its restructuring efforts, Denny's is also lifting the requirement for locations to remain open 24/7 and plans to reduce its menu from 97 items to 46. These changes indicate a significant shift in strategy as the company adapts to the evolving dining landscape and seeks to improve its financial performance.
