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Denny's is shutting down 150 of its eateries.

Denny's plans to shut down 150 of its restaurants within the upcoming year, and the iconic 71-year-old dining establishment is considering implementing significant alterations to its around-the-clock operational schedule.

Denny's plans to shut down 150 of its establishments by the year's end.
Denny's plans to shut down 150 of its establishments by the year's end.

Denny's is shutting down 150 of its eateries.

Around 50 Denny's restaurants are set to close by the end of 2024, with another 100 shutting down in 2025. This represents approximately 10% of their total locations, leaving 1,375 outlets once this process is complete. Denny's haven't yet disclosed which specific restaurants will be affected.

Denny's is focusing on addressing "underperforming restaurants" that are impacting the company's financial health, as stated by Steve Dunn, Denny's executive vice president and chief global development officer. These locations either require extensive renovations that are no longer feasible or are situated in areas where they are no longer profitable.

Denny's, renowned for never closing its doors, is also making a significant compromise with its franchisees regarding the 24/7 operation requirement. Due to the pandemic, around 25% of their restaurants haven't returned to their constant operation hours, which is why Denny's is now lenient towards franchises not adhering to this requirement.

Denny's is part of a larger trend among restaurants reducing their operating hours since the pandemic. The shift in customer behavior, such as earlier dinner times, less consumption of alcohol late into the night, and higher labor and food costs, have hindered the return to pre-pandemic trends.

Dunn acknowledged that 24/7 operation hours are a "common contraction" for everyone in the industry, and the decrease in foot traffic during off-hours doesn't justify a restaurant staying open.

Further changes at Denny's include a streamlined menu, with the number of options reduced from 97 to 46. They also noticed an increase in cash-strapped adults ordering from the kid's menu to save money.

Denny's shares decreased by 17% on Tuesday following the release of earnings that fell short of analysts' projections. The stock has dropped by 50% so far in 2023.

Denny's is looking to revamp underperforming restaurants in their business, aiming to improve financial performance by either renovating unfeasible locations or closing those in unprofitable areas. The food industry, including Denny's, is shifting its operating hours due to pandemic-induced trends, such as earlier dinner times and higher labor costs, leading to reduced foot traffic during off-hours.

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