It's a real sign of the times when even a cornerstone of US fast food such as Denny's is struggling to keep from closing many of its restaurants. The staple of breakfast, and famous 24/7 opening hours, is having to permanently shut the doors on 150 of its 1,500 establishments around the country.
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The 150 chosen restaurants are all among the worst-performing in the chain. Many of them are outdated buildings, in need of refurbishment. However, the cost to refurbish, including kitchens, dining areas, and more, simply isn't feasible. These underperforming restaurants just aren't turning a profit like they used to.
What's Changed For Denny's?
There are several factors at play that have resulted in Denny's closing so many stores. One thing is for certain though, it isn't the US's consumption of fast food. According to MoneyDigest "fast food in the United States continues to grow, with fast-food restaurants in the U.S. earning an incredible $278.6 billion in revenue in 2021. In 2023, people spent, on average, $148 every month on fast food."
Clearly, there is no shortage of love for quick, easy, on-the-go food, but Denny's just isn't getting their slice of the pie. Many of their stores have taken a step back from their trademark 24/7 opening hours. One-quarter of Denny's never resumed that tradition once the pandemic was over, choosing closing hours over constantly being open.
One of Denny's managers blames the mass closing on two factors. He says that the fast food chain used to rely heavily on business conventions bringing in crowds of hungry employees. However, now that so many companies are happy to let their employees work from home or hybrid, these groups have dried up.
The same manager claims that a huge influx of dine-and-dash customers is also heavily denting profits. However, these two reasons don't seem like they add up to enough of an impact to cause the closing of a tenth of the country's Denny's and the drop of 17% of their stock price.
Will this be the end of the legendary 24/7 breakfast chain, or will it simply condense itself down into a much more focused and respectable food joint?
