Denny's Shuttered Dozens of Restaurants Last Year—Here's Why
If you suspected that there were far fewer Denny's restaurants than usual at the end of 2023, that wasn't just a figment of your imagination.
The diner chain, best known for its breakfasts and loaded Grand Slam plates, shuttered 57 locations last year. The reason? As CFO Robert Verostek revealed during a Feb. 13 earnings call, Denny's continued to struggle with inflation in 2023 and ultimately ended up shuttering dozens of its restaurants as a result.
Verostek noted that even though inflation slowed in 2023, soaring costs still took a major toll on its restaurants. A Denny's location used to have to generate about $1 million in order to stay open. But lately, that benchmark has increased to about $1.2 million due to inflation, Verostek said.
He added that Denny's is still working on closing some additional restaurants "as a result of those inflationary pressures," but didn't say exactly how many more locations may be shuttered.
Denny's ended last year with a total of 1,573 global locations, down 29 from the 1,602 locations it had at the end of 2022. The 57 Denny's closures were somewhat offset by 28 new restaurant openings in 2023.
Looking forward, the chain is aiming to get back to a "more normalized rate" of restaurant closures in 2024, Verostek said. Denny's also hopes to open about 30 new restaurants this year. Verostek explained that new locations usually see double the sales volumes of older locations, so these new openings could help make up for the dozens of units that it lost last year.
This year, the company also plans to expand the footprint of Keke's Breakfast Cafe, a Florida-based breakfast and lunch chain that it acquired back in 2022. There are currently about 60 Keke's locations total, all but one of which are located in the Sunshine State.
Denny's opened the sole Keke's restaurant outside of Florida in Hendersonville, Tenn., just a couple of weeks ago to gauge how it would perform outside of its home state. Denny's CEO Kelli Valade revealed during the earnings call that sales were "strong" for the first week at the Hendersonville Keke's and they "continue to be impressive" now.
Valade also announced that they've inked 14 agreements to open more than 100 additional Keke's locations in multiple states moving forward, which would help the chain more than double in size. And don't be too surprised if the Keke's expansion plans become even more ambitious in the future.
"We expect this number to grow and will soon be talking about many more," Valade said.
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