Recently, An American fast-food chain, Denny's (DENN, Financial), decided to close 150 restaurants, accounting for nearly 10% of the entire number available and currently operating. Announced on Tuesday during an investor meeting, this decision was made as the company has been struggling for many years and has experienced a year-on-year slump in same-store sales for the fifth quarter.
The exits are planned in two stages; the first 50% of the outlets are intended to shut in the current year, and the other half in the next year, 2025. No outlets have been identified by name, but the brand aims at outlets that have become less suitable over time or never regained traffic patterns disrupted by the pandemic, Denny's Executive Vice President and Chief Global Development Officer Stephen Dunn said.
A 70-year-old brand, Denny's, also admits that some of its stores are rather old, which affects the results. The pandemic has also permanently changed customer flow patterns, which has affected concrete places.
Despite nominal increases in the restaurant group price index that average grocery store price inflation and statistical significance, Denny's drew attention to consumers' shift towards cheaper meals and faster and informal outlets, such as quick-service restaurants and fast-food outlets, in which Denny's chiefly competes.
Still, the company pointed to some bright spots: the value menu has been driving sales, and consumers are increasingly embracing delivery-only brands such as Banda Burrito.
However, the share prices of the company and many others have plummeted. The announcement reached it especially that shares of Denny's Corp., based in Spartanburg, South Carolina, fell to 17.87% on Tuesday. Restructuring plans clearly capture the picture of an organization that has been challenged in handling the change in the dining environment and market in particular.
