Denny’s to close 150 restaurants as chains continue to struggle
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The popular diner chain Denny’s will close 150 locations by the end of next year amid declining revenue and changing consumer habits, the company announced on Tuesday, Oct. 22. Known for its 24/7 service and wide selection of comfort food, Denny’s has been a mainstay for diners since its founding 71 years ago. In the face of modern challenges, however, the company reported lower-than-expected earnings for the third quarter, and its stock has plummeted nearly 50 percent this year alone.
The decision to close locations comes as Denny’s grapples with shifting consumer behavior and financial pressures. About 50 locations are set to shut down in 2024, with approximately 100 more closures planned for 2025. This location reduction represents about 10 percent of Denny's overall footprint, a significant move for a chain that has long prided itself on accessibility and consistency. According to the company’s earnings report, total operating revenue for the third quarter was 111 million dollars— a decline from 114 million dollars in the same quarter of the previous year. Operating income also dropped from 14 million to 11 million dollars within that time, reflecting the larger struggle to maintain profitability in a challenging economic environment.
Following the closure announcement, Denny’s stock tumbled 17 percent on Tuesday to 5.47 dollars. This sharp decline highlights investor concerns over the company’s trajectory as it joins a growing list of casual dining chains facing similar headwinds. This has also affected a smaller diner chain owned by the Denny’s company, Keke’s Breakfast Café. Though it is a largely regional stop, with most locations in Florida, it still boasts 60 total locations; the wider struggles within the restaurant industry have also impacted it.
Like other casual dining chains, Denny’s has struggled to attract customers who increasingly favor fast-casual options, such as Chipotle, or more affordable fast-food outlets. This trend is further compounded by the impact of inflation on the restaurant industry, which has outpaced inflation in grocery prices. This has been making dining out a less appealing option for many consumers. Denny's revealed that family dining, the category in which its restaurants compete, has lost the most customer traffic since 2020— with many consumers opting to eat at home or choose more affordable dining options when they do go out.
Beyond closures, Denny’s has been forced to re-evaluate its signature 24/7 operating model. For decades, Denny’s stood out as one of the few major chains where customers could get a hot meal at any hour, a feature that became central to its brand identity. The pandemic, however, brought major changes to customer behavior, including a shift toward earlier dinner times and reduced demand for late-night dining. As Denny’s CEO John Dunn acknowledged, “[the] contraction that happened for everyone” in operating hours has hit the chain hard. With less foot traffic in the late-night and early morning hours, maintaining 24/7 operations in many locations “didn’t make sense” for the company anymore.
This shift also extends to Denny’s menu. To cut costs and streamline operations, the company has slimmed down its offerings significantly. What was once a menu of 97 items has now been pared down to 46, focusing on best-sellers and core dishes. The chain has also observed a shift in consumer behavior that underscores the broader economic pressures facing many Americans: financially stressed adults are increasingly opting to order from the kid’s menu to save on meal costs, a choice that reflects how budget-conscious even casual dining customers have become.
Denny’s closures are part of a broader trend of restaurants adjusting hours and reducing services post-pandemic. Many eateries have found that the combination of higher food and labor costs and changing social habits means that remaining open late into the night is no longer viable. While Denny’s is trying to adapt, including experimenting with reduced hours in some locations, the question remains whether these changes will be enough to keep the company afloat amid ongoing challenges.
The broader restaurant industry watches closely as Denny’s faces these existential questions. The outcome for Denny’s and other struggling chains will provide insights into how family-style dining can —or cannot— adapt in an era where convenience, price, and changing social patterns increasingly shape consumer choices. The closures and restructuring may be part of a necessary evolution, but they also mark the end of an era for a chain that once symbolized accessible dining at any hour