Denny’s is the latest restaurant chain to reduce its footprint. The chain has announced it will close 150 restaurants over the next 12 months. It expects to close 50 by the end of 2024 and is considering changes to its operating hours.
The company said it is closing locations that are under performing expectations. Some are old and can’t be remodeled and others are in locations that are no longer profitable.
People in the restaurant industry say there are many reasons some restaurant chains are struggling.
“While customer demand has returned, restaurants are still dealing with rising operational costs, supply chain disruptions, and labor shortages that have only worsened post-pandemic,” said Milos Eric, co-founder of OysterLink. “The financial pressures, paired with debt repayment, have made it extremely difficult for some establishments to stay open, even as hiring continues to meet day-to-day demand.”
Looking for something more than 'basic'
Bob Vergidis, chief vision officer at pointofsale.cloud, sees other challenges in the industry as consumer preferences shift. He says customers aren’t seeking “basic” restaurants anymore and when they are delighted or disappointed, social media amplifies their opinions across the internet.
“Mediocre food or poor service no longer go unnoticed.” he said. “Restaurants with weak offerings risk rapid closures in today’s fast-moving market.”
Denny’s is well known for never closing its doors, so a hungry customer can get a plate of bacon and eggs at 3 a.m., but that may change. Many Denny’s locations began closing at night during the pandemic and never returned to a normal schedule. The company said it is reviewing its requirement that franchises remain open 24 hours a day.