Just on the heels of Shari's permanently closing, Denny’s has announced plans to shutter 150 of its lowest-performing restaurants as part of an effort to revitalize its declining sales. However, the company has not yet revealed which specific locations will be affected, leaving uncertainty about which communities will see closures.
Around half of these closures are set to occur this year, with the remaining expected in 2025. The decision, which represents about 10% of Denny’s total restaurants, was shared during a meeting with investors on Tuesday.
Denny’s has a presence across Oregon, with restaurants in cities including Portland, Eugene, Salem, Medford, and Klamath Falls. It remains unclear if any Oregon locations will be among those slated for closure, as the company has not provided details on which restaurants are targeted.
Stephen Dunn, Denny’s executive vice president and chief global development officer, explained that many of the restaurants under review are no longer in ideal locations. “Some of these restaurants can be very old,” Dunn noted during the meeting. “You think of a 70-year-old-plus brand. We have a lot of restaurants that have been out there for a very long time.”
Additionally, some locations have struggled to recover customer traffic since the pandemic, further contributing to the closures.
Denny’s has reported its fifth consecutive quarter of year-over-year sales declines at stores that have been open for at least a year. The company pointed to rising restaurant costs, which are now outpacing grocery price inflation, as a major factor. As a result, some customers are finding it harder to justify dining out, opting instead for fast-casual chains like Chipotle or other fast-food options. The family dining segment, where Denny's competes, has been hit hardest by declining traffic since 2020.
Despite these challenges, Denny’s highlighted some positive trends, including increased sales from its value menu and delivery-only brands such as Banda Burrito.
Shares of Denny’s Corp., based in Spartanburg, South Carolina, fell nearly 18% following the announcement. Whether Oregon locations will be affected remains to be seen, but the uncertainty is sure to be felt by Denny's customers statewide.ed nearly 18% following Tuesday’s announcement.
