A top executive from Denny's, a popular restaurant chain, has shared that money problems forced them to close several diners across the United States in the past year. These closures might keep happening into 2024.
The Chief Financial Officer (CFO) of Denny's, Robert Verostek, pointed to rising prices as the reason behind shutting down 57 locations. He made this statement during a meeting about the company's earnings on February 13.
Rising Costs and Future Closures at Denny's
In a recent financial discussion, Robert Verostek, the Chief Financial Officer of Denny's, shared that the company faced significant economic challenges in 2023 due to increasing costs.
Verostek explained that the amount needed for a Denny's restaurant to remain operational has jumped significantly. Previously, a location needed to make $1 million, but now, this figure has risen to $1.2 million.
Looking ahead to 2024, Denny's plans to shut down more restaurants. This decision is a direct response to the ongoing pressure from rising costs. However, Verostek did not specify the exact number of restaurants that might close.
Verostek shared some positive news amidst the chain's ongoing challenges. He mentioned that around 30 new Denny's restaurants will open this year. Interestingly, these new locations often bring in twice as much sales as the older ones.
This increase in sales from the new units is likely to balance out the loss caused by the closure of several restaurants last year. The opening of these new branches shows a sign of growth and adaptation for the company in a challenging economic environment."
Despite these challenges, Verostek remains hopeful. He mentioned that Denny's aims to return to a 'more normalized rate' of closing restaurants in 2024, indicating an effort to stabilize the situation.
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Denny's Balancing Closures with 30 New Openings
Denny's, facing a period of closures, has announced plans to open 30 new restaurants this year. The company's Chief Financial Officer, Robert Verostek, shared that launching new locations typically leads to a doubling in sales compared to the older ones.
The strategy behind these new openings is to compensate for last year's numerous closed restaurants. This approach aims to maintain, if not enhance, the company's overall performance despite the recent downsizing.
Kelli Valade, Denny's President and Chief Executive Officer, also spoke during the call. She emphasized the company's clarity and strong focus for 2024.
"Looking ahead to 2024, we entered the new year with a clear focus on what is appealing to our customers and a laser-like focus on our three strategic areas,' said Valade, highlighting the company's dedication to its growth and customer satisfaction strategies."
While Denny's is opening new restaurants, many customers feel the loss of their local diner. Denny's recent closure in Chubbuck, Idaho, disappointed local customers.
The restaurant, located in the southeastern part of the state, shut down on February 11, as confirmed by Denny's. The decision, made by the local owner, was described as challenging.
Expressing gratitude to staff and patrons, Denny's encouraged visits to other Idaho locations. However, the nearest Denny's is now 50 miles away, posing a challenge for Chubbuck residents who enjoyed the diner.
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