(NEXSTAR) — Denny’s was already planning on closing 150 low-performing restaurants by the end of 2025, but now the company says even more locations will shutter this year.
In October, the company indicated that the 150 closures — about half of which occurred in 2024 — were part of an attempt to turn around its flagging sales. At the time, Stephen Dunn, Denny’s executive vice president and chief global development officer, said that some of those restaurants were no longer in good locations.
“Some of these restaurants can be very old,” Dunn said during the October 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.”
In an update to investors on Wednesday, Denny’s said 88 restaurants were closed throughout all of 2024, with 30 coming during the fourth quarter.
In 2025, the company plans to close between 70 and 90 restaurants. A list of exact locations expected to close was not immediately available.
“In any mature brand, when restaurants have been open that long, it is natural that trade areas can shift over time,” Robert Verostek, the company’s chief financial officer, said during a call with investors. Some of these closures, he added, are restaurants with expiring leases.
Kelli Valade, the chief executive officer of Denny’s, said the company, which also owns Keke’s restaurants, had “made significant progress in our strategy to enhance the overall health of our flagship brand by accelerating the closure of lower-volume restaurants” in addition to roughly two dozen remodels. Denny’s also expects to open between 25 and 40 new locations this year.
Denny’s also expected “a sense of normalcy ahead” regarding consumers, who had been spending differently in light of the COVID pandemic and high inflation. Verostek, however, noted that there “has been a shift in consumer sentiment and a slowing that persisted through the remainder of January and has seemingly accelerated in the last few weeks given the evolving macro environment.”
According to Valade, the company expects this shift to be “temporary.”
Inflation, however, is trending up, the latest report from the Labor Department shows. There are also egg costs, which have climbed so high fellow breakfast-focused chain Waffle House has added a surcharge to egg orders. Verostek said Denny’s is working with its suppliers to “ensure minimal disruptions” in that department.
The Associated Press contributed to this report.
