Denny’s, a beloved American diner, has recently closed 15 more restaurants across the United States, adding to the 57 closures last year and 60 in 2022. The chain has been grappling with the challenges posed by rising costs and falling sales.
One of the most recent closures was the final Denny’s in Langthorne, Bucks County, Pennsylvania, which shut its doors on June 19. Another popular Denny’s in Ashland, Ohio, also closed last month. These closures highlight the ongoing struggles faced by the restaurant industry, particularly in the wake of two years of significant price increases.
Despite Denny’s efforts to increase prices, its same-store sales were down 0.6 percent compared to the previous year. This decline indicates a sharp drop in customer numbers. Robert Verostek, Denny’s executive vice president and chief financial officer, attributed the closures to the impact of inflation, noting that the breakeven point for a restaurant to remain open has risen from $1 million to $1.2 million due to higher costs for food and wages.
In response to the challenges, Denny’s is joining the value wars, aiming to attract customers by offering competitive pricing. The chain plans to officially relaunch its $2-$4-$6-$8 value menu later this summer. Denny’s CEO Kelli Valade expressed enthusiasm for the return of the chain’s classic meal deals, stating that this value platform is unique to Denny’s and has historically driven significant traffic.
Other fast casual restaurants, such as Applebee’s, have also introduced value deals to combat mass closures. Applebee’s recently launched the ‘Whole Lotta Burger’ with fries for $9.99, aiming to appeal to inflation-weary customers who have cut back on dining out. The move to compete with fast food chains is also evident in Chilli’s, which introduced a $10.99 burger meal that is larger and more affordable than the Big Mac.
As the restaurant industry continues to navigate the challenges posed by rising costs and changing consumer behavior, it remains to be seen how Denny’s and other chains will adapt to the evolving market conditions.
Article generated from corporate media reports.
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