By james art NEW YORK — Denny’s is closing 150 restaurants next year, and the 71-year-old chain is considering a major overhaul of its 24/7 hours.
Fifty locations will close by the end of 2024, while the remaining 100 will close in 2025, Denny’s announced on Tuesday’s earnings call. That equates to a tenth of its restaurants, leaving 1,375 seats once completed. A specific list of closing restaurants was not immediately announced.
According to Steve Dunn, Denny’s executive vice president and chief global development officer, Denny’s is targeting “underperforming restaurants” that are weighing on the company’s financial results. The sites affected are either too old to be reconstructed or in areas that have become unprofitable.
The chain best known for never closing its doors also makes a big concession with franchisees regarding the requirement to stay open 24/7. Since the pandemic, about a quarter of its restaurants have not returned to those 24-hour hours, so Denny’s is easing the franchise requirement to do so.
Denny’s joins a broader trend of restaurants cutting back hours in the wake of the pandemic. Major changes in customer behavior, including earlier dinner times and less late-night drinking, are preventing a return to pre-pandemic patterns. Higher labor and food costs also caused restaurants to close earlier.
For Denny’s, Dunn acknowledged that the 24/7 hours are a “contraction that happened to everybody” and that less traffic during those off-hours means “it doesn’t make sense” for the restaurant to stay open.
Other changes at Denny’s include a reduced menu, with the number of options reduced to 46 from 97. The chain has also noticed that cash-strapped adults are increasingly ordering from its children’s menu to save money.
Shares of Denny’s (DENN) fell 17% on Tuesday after earnings beat analysts’ expectations. Shares are down 50% for the year.