Restaurants

Denny's says it expects to close 150 locations by the end of 2025

Restaurant inflation is outpacing grocery price inflation, which makes it harder for some customers to justify eating out, Denny's said.

Denny's restaurant sign
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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 around 10% of Denny’s total.

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.

Copyright The Associated Press
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