Denny’s plans to close 150 underperforming restaurant locations by the end of 2025 as part of a strategy to address declining sales. Here are the key points surrounding this decision:
- Reason for Closures: Denny’s has experienced a fifth consecutive quarter of year-over-year declines in same-store sales, prompting the need for closures to revitalize the brand’s performance.
- Location and Age of Restaurants: Many of the affected locations are older and poorly situated, with some operating for over 70 years. These factors contribute to their underperformance.
- Timeline for Closures: Approximately 75 of the closures are slated for this year, with the remaining 75 expected in 2025.
- Impact on Sales: The closures aim to enhance the average annual unit volume (AUV) and foster net unit growth for Denny’s.
- Stock Performance: The announcement triggered a nearly 18% drop in Denny’s stock price, reflecting investor concerns over the brand’s struggles.
CEO Kelli Valade noted that the company is also exploring options to reduce operating hours and streamline the menu, aligning offerings more closely with customer preferences.
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