Denny’s Corporation will expand its Mexican-inspired virtual brand this year as part of a bid to capitalize on off-premise dining more. They're starting in California and will expand it to the rest of the country later in 2024, but will this latest initiative to drive customer traffic really work? In California and much of the southwestern U.S., Denny's is popular with Hispanic customers for the value option, but not really for Hispanic themed dishes. Same with the rest of the U.S. dining public, Denny's is associated with value, affordability, but they really haven't communicated that to the dining public during the last 3 years of high inflation. Only starting this past April 2024 did they start advertising the all day $5.99 diner deals which is heavy on the breakfast side- 4 items plus a cheeseburger and country fried steak option.
The lack of messaging to the public has really hurt sales during this period of high inflation so instead negative reviews on Yelp, Google, Trip Advisor, other social media are creating the perception that it's a low class chain, dirty dishes, tables/chairs in disrepair. Was just at a Denny's a few weeks ago and the experience was a let down, the mac 'n brisket skillet was ok, but ordered a cheesecake for dessert- the cake was mostly frozen and the strawberry topping was dry/stale. The stock has been trashed, going well below $10 in the last 6 months, nowhere near the March 2021 reopening craze high of $19.51, it's currently trading around $6.60. Is Denny's leadership doing too little too late with the Banda Burrito that's popular with the food delivery app crowd and $5.99 meal deals? Own shares, but this isn't producing confidence since Red Robbin Burgers, Applebee's, Chili's gave up on virtual brands because they didn't raise incremental sale as anticipated.
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