By Associated Press and IBJ Staff
Denny’s says it’s closing 150 of its lowest-performing restaurants in an effort to turn around the brand’s flagging sales.
About half of the closures will happen this year and the rest in 2025, the company said during a meeting with investors Tuesday. The locations weren’t revealed, but the restaurants represent about 10% of Denny’s total.
Denny’s has 29 restaurants in Indiana, down from 36 in 2020. The chain has seven eateries in Indianapolis and one each in Westfield, Whiteland and Shelbyville. Denny’s locations in Avon, Whitestown, Lebanon and Bloomington have closed over the past two years.
Stephen Dunn, Denny’s executive vice president and chief global development officer, said in some cases, the restaurants are no longer in good locations.
“Some of these restaurants can be very old,” Dunn said during the investor meeting. “You think of a 70-year-old plus brand. We have a lot of restaurants that have been out there for a very long time.”
Others saw traffic shifts during the pandemic that have yet to reverse, he said.
On Tuesday, Denny’s reported its fifth straight quarter of year-over-year declines in same-store sales, which are sales at locations open at least a year.
Restaurant inflation is outpacing grocery price inflation, which makes it harder for some customers to justify eating out, Denny’s said. And when they do eat out, they often head to fast-casual brands like Chipotle or fast-food chains. Denny’s said family dining—the category in which it competes—has lost the most customer traffic since 2020.
Still, Denny’s said it has bright spots, including a value menu that lifted sales in its most recent quarter and growing sales of its delivery-only brands like Banda Burrito.
Shares in Denny’s Corp., which is based in Spartanburg, South Carolina, tumbled almost 18% on Tuesday.
Denney’s was founded as Danny’s Donuts in 1954 in Lakewood, California, and changed its name to Denny’s in 1961.
Known for being open 24 hours a day (most of its restaurants didn’t have locks until 1988) and the Grand Slam breakfast it introduced in 1977, Denny’s grew to more than 1,700 restaurants in 2019. That number had fallen to 1,536 by June 26.
All but 61 of Denny’s restaurants are franchised.
