Denny's is closing 150 locations in the latest sign of the squeeze on family dining

• Denny's plans to adjacent 150 stores to boost yearly portion measurement income amid declining sales.
• Chains that traditionally pull much families, for illustration Red Lobster and Applebee's, are emotion nan squeeze.
• "Families person been deed difficult by ostentation and truthful are eating retired less," 1 expert told Business Insider.

Denny's is nan latest casualty of nan compression connected family eating chains, announcing this week that it plans to adjacent astir 150 locations earlier 2026.

A Securities and Exchange filing from nan concatenation Tuesday showed that astir 50 stores will beryllium unopen this year, pinch an further 100 closing successful 2025.

This represents astir 10% of Denny's 1,586 stores overall. It has not yet been announced which locations will close.

"We judge this is perfectly nan correct point to do to make our strategy stronger," Denny's CEO Kelli Valade told investors.

To scope a extremity of increasing yearly portion measurement income to $2.2 million, Valade said "underperforming" restaurants would beryllium closed.

A difficult economical environment

"This move should not beryllium viewed arsenic a antagonistic reflection connected Denny's aliases nan broader edifice industry, but alternatively arsenic a strategical accommodation to support financial wellness successful a difficult economical environment," Gregg Majewski, CEO and laminitis of Craveworthy Brands, told Business Insider.

Shifts are presently happening successful each kinds of eating spaces, and sometimes consolidation is basal to thief nan wide brand, he said.

On Tuesday, nan 71-year-old patient reported a 0.1% diminution successful same-store income successful its 3rd quarter, and shares subsequently plummeted 18% that day.

It signifies nan 5th consecutive 4th of year-on-year income slumps.

Families person been deed difficult by inflation

Neil Saunders, nan managing head of GlobalData's US unit and user division, told BI that though edifice spending is forecast to turn by almost 5% successful 2024, this is predominantly driven by higher prices and inflation.

"Generally, nan family eating conception wherever Denny's sits is much pressured arsenic families person been deed difficult by ostentation and truthful are eating retired little aliases are trimming spending erstwhile they do eat out," he said.

2024 has truthful acold been a tough twelvemonth for nan fast-food industry.

Starbucks, McDonald's, KFC, In-N-Out, and Olive Garden are some of nan chains that person raised prices successful consequence to nan soaring costs of labour and commodities.

"Everyone has mislaid traffic," Denny's CEO Valade said.

The once-thriving family eating manufacture has been peculiarly severely hit. During nan summer, Red Lobster closed complete 100 restaurants crossed nan US, and Applebee's closed dozens.

"Operational costs person skyrocketed pinch nutrient prices rising pinch inflation," Tomas Gorny, nan CEO of Nextiva, a customer acquisition guidance company, said.

He explained that workers are besides becoming harder to find, and customers person little discretionary money to indulge successful meals out.

"They request cheaper meals and person higher expectations," Gorny said.

The move toward takeout

The emergence successful takeout has besides impacted family eating arsenic much customers look to bid nutrient successful alternatively than spell out.

"Fewer customers dine out, and that includes families," Elijah Puzhakov, nan main communications serviceman astatine Restaurantanji.com, told BI.

Quick-service restaurants tin entreaty much to group looking for a accelerated meal, he said.

"They are drafting customers distant from accepted family eating establishments," Puzhakov said.