Denny’s has announced plans to close 150 restaurants over the next year to improve its financial performance, targeting underperforming locations that are either too old for remodeling or in unprofitable areas.
The closures will occur in two phases, with 50 locations set to shut down by the end of 2024 and the remaining 100 scheduled for closure in 2025, reducing the total number of Denny’s restaurants to 1,375.
The big picture: In response to changing customer behavior and economic challenges, Denny’s is considering a significant change to its long-standing 24/7 operating hours policy, with a quarter of its restaurants having already shifted away from round-the-clock service during the pandemic.
- The company’s franchisees may no longer be required to stay open 24/7, reflecting a concession to accommodate shifts in customer habits such as earlier dining times and reduced late-night alcohol consumption.
- To adapt to evolving market conditions, Denny’s is also streamlining its menu, reducing the number of options from 97 to 46, and acknowledging a trend where cost-conscious adults are increasingly ordering from the kid’s menu.
State of play: Following the announcement, Denny’s shares dropped by 17% after earnings fell short of analysts’ expectations, contributing to a 50% decline in stock value for the year.
