Denny’s introduces new platform to exploit off-premise demandDenny’s introduces new platform to exploit off-premise demand

Denny’s Corp. has deployed a new Shareable Family Packs platform, steamlined its menus for off-premise and labor savings and arranged help for franchisees as it emerges from coronavirus pandemic restrictions, company executive said Tuesday.

The Spartanburg, S.C.-based family-dining chain, in releasing its second-quarter earnings, said average unit weekly off-premise sales had nearly doubled since before the COVID-19 pandemic was declared in March.

“Average weekly sales for all of off-premise have almost doubled since the beginning of the pandemic, growing from approximately $4,000 per week in February to approximately $7,900 in July,” said John Miller, Denny’s CEO.

“As the dining experience shifted for guests,” he said, “it was important for us to develop a streamlined menu to feature some of our more popular products and allow for greater kitchen speed and efficiency.”

The Shareable Family Packs were introduced April 7. They serve four to five people and are priced between $24.99 and $28.99, and all are available for takeout or delivery.

“We have continued to evolve this platform and now offer desserts and milkshakes along with our popular Grand Slam burgers and chicken tender meals for feeding a family of four,” Miller said.

Reduced operating hours for Denny’s units because of coronavirus restrictions were continuing to impact same-store sales. About 30% of the brand’s domestic units are operating at the full 24 hours.

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“Preliminary July systemwide same-store sales were similar to June and down approximately 39%,” Miller said. “This is despite including a partial month of the dine-in shutdown across California, a key state for Denny's that encompasses approximately 25% of our domestic restaurants.”

Miller said he was encouraged that the preliminary same-store sales for the last fiscal week of July were down about 41%, which included the full impact of California again shutting down dine-in capacity.

“These sales results are a significant improvement from the low point of negative 80% in the final week of March and leads us to believe that we have already seen the lowest sales levels of this pandemic,” he said.

Mark Wolfinger, Denny's president, said year-to-date Denny’s closures totaled 31, including 15 franchised restaurants shuttered in New York and reported in May.

Nine of the closed New York restaurants have been either purchased or going to be purchased. They “will be reopening under another franchisee's ownership,” Wolfinger said.

Of the closed restaurants, Wolfinger said, “The AUVs or averaging unit volumes of these restaurants were well below the franchise average prior to COVID-19, and with increasing top-line pressure, these restaurants unfortunately could not sustain in the current environment. The pandemic’s impact accelerated these closings, as we had anticipated them closing in the next several years anyway due to lower sales volumes and continued inflationary pressures.”

He said the average restaurant requires about 70% of its 2019 sales in order to cover both fixed and variable cost items.

For the second quarter ended June 24, Denny’s swung to a loss of $14 million, or 25 cents a share, from a profit of $49.7 million, or 79 cents a share, in the same period last year. Revenues fell 54.9% to $136.9 million from $303.3 million in the prior-year quarter.

“This quarter has proven to be one of the most difficult quarters this country — and especially the full-service restaurant industry — has ever seen,” Miller acknowledged.

Denny’s franchises, licenses and operates 1,683 restaurants around the world, including 147 restaurants outside the United States.

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