Denny’s announced plans to close 150 of its restaurants over the next year and is considering reducing its signature 24/7 operating hours, according to CNN.
The closures will begin with 50 locations shutting down by the end of 2024, followed by 100 more in 2025.
This will leave the 71-year-old diner chain with 1,375 restaurants.
A list of specific locations affected by the closures has not yet been released.
The company is targeting “underperforming restaurants” for closure, particularly those that are too old to remodel or are located in areas that have become unprofitable, said Steve Dunn, Denny’s executive vice president and chief global development officer.
In addition to the closures, Denny’s is reconsidering its requirement for franchisees to operate 24/7.
Since the pandemic, about a quarter of its restaurants have not resumed round-the-clock hours, leading the company to ease up on this long-standing rule.
Denny’s decision aligns with a larger industry trend where many restaurants have reduced hours due to shifts in customer behavior and rising costs.
Dunn acknowledged that changes in consumer habits, such as earlier dining times and reduced late-night traffic, mean it no longer makes financial sense for some locations to remain open all night.
Other changes include a streamlined menu, reduced from 97 to 46 items, as well as a rise in cash-strapped adults ordering from the kid’s menu to save money.
Following the earnings call, Denny’s shares fell by 17%, with the stock down 50% for the year after earnings missed analysts’ expectations.
©2024 Cox Media Group
