The popular restaurant chain Denny’s is set to close nearly 30 locations amid concerns regarding inflation and the bird flu.
Robert Verostek, the company’s chief financial officer, said in a call with investors that the chain may close as many as 90 restaurants this year, the New York Post (NYP) reported Friday. Executives said inflation is to blame for the pullback in sales. Inflation rose in January as the Consumer Price Index went up to 3%, the Bureau of Labor Statistics announced Wednesday.
“In any mature brand, when restaurants have been open that long, it is natural that trade areas can shift over time,” Kelli Valade, CEO of Denny’s, said during a call. “Accelerating the closure of lower-volume restaurants will improve franchisee cash flow and allow them to reinvest into traffic-driving initiatives like our tested and proven remodel program.”
The exact locations of closing stores were not announced as of Friday. (RELATED: Iconic Discount Merchandise Brand To Shutter Around 1,000 Stores As Harsh Economic Factors Weigh On Sales)
“Looking ahead to 2025, there is still work to be done within our brands, particularly as we navigate near-term consumer sentiment that has been affected by macroeconomic factors,” Valade said in a statement Wednesday. “With the actions we are taking to maintain our position as a value leader, invest in our brands, reduce costs, and drive traffic, we are well positioned to deliver shareholder value.”
Denny’s to close nearly 30 more locations as inflation, bird flu slams chain https://t.co/EaOmAOVlRg pic.twitter.com/rnAzAlITTw
— New York Post (@nypost) February 14, 2025
Verostek mentioned how severe weather throughout the country, such as heavy snowstorms and the California wildfires, had an impact on sales, the NYP noted.
The egg shortages due to a national bird flu outbreak has caused other breakfast restaurant chains to adjust pricing, with Waffle House adding a 50-cent surcharge for eggs, CBS News reported. Verostek said Denny’s is “working closely with our suppliers to ensure minimal disruptions,” according to the NYP.
“There is just a lot of uncertainty,” he said.
In October 2024, Denny’s announced its intent to close 150 of almost 1,500 locations nationwide, the Post reported. The chain ultimately closed 88 locations in 2024.