Denny's plans to close nearly 30 restaurants than previously announced, as stubborn inflation threatens the survival of the 72-year-old chain.
In a call with investors earlier this week, the company's chief financial officer, Robert Verostec, said Denny is planning to close as many as 90 restaurants this year.
In October, Denny had disclosed plans to close 150 of nearly 1,500 locations nationwide. The company was to close 88 locations last year.
Verostek's top of new estimates could bring total closures to 178 restaurants.
“It's no surprise that, with every mature brand, trading areas can change over time when restaurants are open for so long,” Denny CEO Kelly Barrede said in a revenue call. .
“Accelerating the closure of low-capacity restaurants will improve franchisee cash flow and allow us to reinvest in traffic driving initiatives, including tested proven remodeling programs.”
Denny's did not specify which locations would be closed.
SC-based Spartanburg is set to open 25-40 restaurants this year, with about half of which going to be in Denny's location. Others are the location of Keke's breakfast cafe, which Denny acquired in 2022.
Executives denounced sticky inflation due to the pullback of sales. Inflation escalated in January as the consumer price index rose to 3%, the Bureau of Labor Statistics said Wednesday.
Severe weather, including catastrophic California wildfires and heavy snowstorms across the United States, has also hurt sales, Verostek said.
“There's a lot of uncertainty,” Verostek added. This is because businesses are trying to measure the impact of President Trump's policies, including tariffs and massive deportation.
With the outbreak of ramp-stretching domestic bird flu, some chains, especially breakfast restaurants, have raised prices on their menus as egg shortages increase prices.
The cost of eggs rose 15.2% last month, according to the Ministry of Labor. This is the largest increase since June 2015.
Earlier this month, Denny's rival Waffle House announced an extra 50 cents per egg to combat the rising costs.
Denny's “works closely with suppliers to ensure minimal disruption,” Verostec said, raising concerns about these impacts as “effective.”
The global chain sprouted from a coffee and donut shop in Lakewood, California, which first opened in 1953.
