The restaurant industry has seen its fair share of ups and downs lately, and Denny’s is feeling the pressure.

The chain has announced plans to shut down 150 of its locations as part of a strategy to address declining sales.

This move reflects broader changes in consumer behavior, which have evolved dramatically in recent years.

Upcoming Closures

Out of the 150 locations that will close, 50 will shut down this year, with the remaining 100 scheduled for 2025.

This decision comes on the heels of 15 closures this summer and a total of 70 in the last two years.

The ongoing challenges are not new; inflation has previously been cited as a major contributor to these struggles.

A Shift in Strategy

Steve Dunn, Denny’s executive vice president and chief global development officer, explained that many of the locations set for closure are either too outdated to be renovated or situated in areas that have lost their profitability.

The company’s sales have declined for five consecutive quarters at locations that have been open for at least a year, signaling a need for change.

Adapting to New Norms

Since the pandemic, Denny’s has not fully resumed its 24-hour service in about 25% of its locations.

Dunn noted that it “didn’t make sense” to keep these hours when foot traffic has dropped significantly.

To adapt, the chain has officially reduced its hours, reflecting ongoing shifts in consumer behavior.

Menu Changes and Value Options

In an effort to attract cost-conscious diners, Denny’s has cut its menu options from 97 to 46 items.

This change comes as many adults have opted for kid’s meals in search of more affordable dining options.

Despite these efforts, Denny’s stock took a hit, dropping 17% after the company reported earnings that fell short of analysts’ expectations, bringing its year-to-date decline to 50%.

Local Closures and Wider Impacts

Recent closures include a location in San Francisco after 25 years of service, attributed to rising crime rates, and another in Pennsylvania that had operated for 45 years.

As many dine-in restaurants face similar challenges, the need for adaptation is clear, with shifting consumer habits and tighter budgets becoming the new norm.

Competing for Customers

To regain market share, restaurants like Denny’s are rolling out value offerings aimed at luring back customers.

For example, Applebee’s has introduced a “Whole Lotta Burger” deal with fries for $9.99, and Chili’s has a larger burger meal priced at $10.99, which competes directly with fast-food giants like McDonald’s.