Denny's is accelerating its restaurant closure plans, revealing a larger number of planned closures for this year than initially projected. The move comes in response to rising inflation and changing consumer behavior, trends impacting many businesses.
Denny's is preparing to close a larger number of restaurants in the U.S. this year than initially forecast, joining a growing list of companies implementing such closures in response to escalating inflation and evolving consumer habits. The breakfast chain disclosed the additional planned closures during an earnings call this week. Denny's had previously announced in October that it anticipated closing 150 of its least profitable locations throughout the latter part of 2022 and into 2025.
Last year, the company closed 88 restaurants, as stated by Denny's. During an earnings call on February 12, Denny's Chief Financial Officer Robert Verostek revealed that the company projects to close 'between 70 and 90 restaurants in 2025, which includes some closures related to lease expirations.'While a specific list of targeted Denny's restaurant closures was not released, and the company did not immediately respond to a request for such information, if the chain proceeds with the upper estimate of 90 closures this year, in addition to the previously announced 88 restaurant closures, it would represent nearly 30 more locations than initially anticipated. There are over 1,500 Denny's locations across the country, according to its website. 'These closures had an average unit volume of slightly under $1.1 million and were open on average for nearly 30 years,' Verostek informed investors. 'In any mature brand, when restaurants have been open that long, it is natural that trade areas can shift over time.' Verostek further added: 'As trends stabilize and our second-half sales initiatives are implemented, including remodels and a new loyalty program, we anticipate comps will rise throughout the year and place us more firmly within the range.' Notably, the company also anticipates opening between 25 and 40 new restaurants – half of which are expected to be Denny's and the other half Keke's Breakfast Café – which Denny's acquired in 2022
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