Denny's Launches $1 Slam Deal After Customers Pull Back Spending
It's a rough climate for the fast-casual restaurant business, and no one is feeling the pinch more than chains like Denny's. Once a staple cheap option for breakfast, pancakes, and more, the company is floundering in the current economic climate as customers prefer to stay home and cook or spend money elsewhere.
"Consumer sentiment remains negative as fear around tariffs and higher price of goods, combined with concerns about the job market resulted in consumers pulling back on spending," said CEO Kelli Valade, via Nation's Restaurant News. "We are now operating in one of the most aggressive value-driven environments we've seen in years. Guests are stretched, inflation pressures remain, and every brand is fighting for share by pushing harder on price and promotion while trying to win with the guest experience."
Denny's chief financial officer Robert Virostek says households making less than $50,000 a year have pulled away the most, forcing Denny's to rethink its approach to value in an effort to bring them back in. One tactic the chain just tried is introducing a BOGO deal designed to lure new or lapsed customers back into the restaurant: Guests can buy an Original Grand Slam (two buttermilk pancakes, two eggs, and two Applewood-smoked bacon strips and two pork sausage links) or an All-American Slam (scrambled eggs with cheddar cheese, two Applewood-Smoked bacon strips, two pork sausage links, hash browns, and white toast), and get a second for $1. That means twice as much pancakes and eggs (dine-in customers only). It's clearly working, with nearly 70% of BOGO transactions from former and new customers according to Valade.
Denny's was also forced to add an egg surcharge to combat the dramatic spike in egg prices as a result of the avian flu—something the chain says customers understood. "We did not see an impact to our guest sentiment scores as a result," Verostek said.
Denny's also released a new line of "Slammin' Sodas", the chain's take on the dirty soda trend. Guests can choose a Sprite, Coca-Cola, or Dr Pepper, mixed with sweet cream and a slice of lime.
Guests have long considered Denny's one of the more reasonable options for a family meal. "Today we went to Denny's for breakfast with my wife and kid. Three orders of pancakes, two strips of bacon, two coffees, one chocolate milk, multiple refills and even coffee to go… $18. Normal prices. I couldn't believe it. Strange times when you have to celebrate a business for not milking every penny out of you, but credit where credit is due," one Redditor said. "I frequently rate restaurants around by asking myself: is this really that better than the sirloin steak at Denny's to cost so much more than it? It is very often that the answer is no," another agreed.
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