Denny's, the popular diner chain known for its round-the-clock service, plans to shut down 150 locations by the end of 2025. This decision follows a year of declining revenue and changing consumer habits, as detailed in the company's latest financial report.
Denny's revealed lower-than-expected earnings for the third quarter, leading to a significant 50% drop in share value this year.
Denny's to Close 150 Locations
The closures will start in 2024, with 50 locations shutting down, followed by 100 more in 2025. The company has yet to reveal the specific restaurants that will close, but executives have indicated they are targeting underperforming locations, according to CNN.
These sites are either too outdated for renovation or located in areas where they no longer generate profit. Denny's reported $111 million in revenue for the third quarter, a drop from $114 million in the same period last year.
The company's operating income also fell, decreasing from $14 million to $11 million. Despite attempts to enhance brand value and highlight affordability, these financial struggles continue to impact Denny's overall performance.
Executive Vice President Steve Dunn explained that the closures are part of a broader effort to focus on the company's stronger locations. In addition to the shutdowns, Denny's will no longer require its restaurants to stay open 24/7 and plans to reduce its menu items from 97 to 46 to streamline operations.
Industry Struggles and Future Plans
Denny's is not alone in facing financial challenges. Rising labor costs, inflation, and shifting customer behavior have affected many restaurant chains. This year, well-known chains such as Red Lobster, Rubio's Coastal Grill, and Buca di Beppo have all filed for bankruptcy protection, struggling to cope with the same economic pressures.
As Denny's navigates through these challenges, some customers have noticed price increases at its locations. For example, the popular Lumberjack Slam meal now costs nearly $18 at some locations, leading to online discussions about price hikes, according to Fox Atlanta.
Despite the closures, Denny's still operates over 13,000 restaurants across the US, but its future depends on adapting to economic changes and shifting customer preferences.
