Denny’s CEO: Supply chain ready as brand enters European marketDenny’s CEO: Supply chain ready as brand enters European market

Denny’s Corp. officially announced Wednesday the family-dining brand is expanding to the U.K., after generating plenty of buzz in September by launching new social media accounts for an upcoming group of restaurants on the island nation. 

The inaugural U.K. location will open in Swansea, Wales, by year’s end. It will be the Spartanburg, S.C. company’s first European unit, joining 125 locations in 12 foreign countries, including Honduras, Costa Rica and the Philippines. Stateside, Denny’s currently has about 1,600 restaurants in operation.

“It’s taken us 64 years, you can imagine how excited we are,” Denny’s CEO John Miller told NRN in a phone interview. “I don’t know how many countries there are in the world,” he joked. “It’s been too many years since my last geography class in high school, but a lot.”

Miller said that Denny’s believes that it has “enough brand differentiation” to make the move to Europe an “appealing proposition” and that he’s not surprised by the length of time it took to reach that point.

“Family dining exists in every market,” he said, adding that Europe invented the concept with the traditional, local pub.

“The notion of what a family diner does is fairly well developed,” Miller said. “The notion of breakfast all day, as well as American exports such a mom’s cooking rather than grill and bar has come of age.”

But up until recently, the demand just wasn’t there, Miller said.

Casual or full-service restaurant chains, he said, are often drawn first to regions such as the Middle or Far East, where there is both a high demand for Western concepts and a dearth of similar options.

Denny’s, for instance, already has a presence in the United Arab Emirates.

“Europe is usually the last frontier” said Miller in regard to American casual-dining expansion. Even established brand strength overseas, he said, is not enough to necessarily set up shop, and logistical considerations must first be resolved.

After growing Denny’s network of international locations in other regions, however, the company is confident that its supply chain and support system is ready for the move to Europe, he said.

Established U.K. franchisee and head of Denny’s Magic Diners U.K, Leon Esfahani, is partnering with the company to open the restaurants.

“I am a massive fan of the Denny’s brand and have always enjoyed dining at Denny’s restaurants while on holiday,” Esfahani told NRN in an email. Esfahani has operated franchised locations for other notable U.S. brands such as Starbucks and Pizza Hut.

“In the U.K., we are lacking quality, consistent breakfast options and are thrilled to bring the diner experience to our residents and visitors,” he said. “It’s clear from the social media response that fans in the U.K. crave Denny’s and are excited they no longer need to go on holiday to enjoy the delicious diner menu and ‘come as you are’ atmosphere.”

The U.K. menus will be similar to their domestic counterparts, with some slight changes that reflect the restaurant’s locality.

“We want to be your local diner first, the come as you are casual, non-pretentious place,” said Miller, adding that location-specific menu options make that possible. Miller declined to provide further details on the U.K. menus as they have not yet been finalized.

Miller said that Denny’s recent domestic growth played a significant role in positioning the brand as a viable option in the European market.

“The revitalization of our brand is on track,” said Miller. “We’re in our sixth consecutive year of positive growth,” adding that he expects to achieve a seventh in 2018.

Part of Denny’s recent success can be credited to the addition of delivery to the brand’s strategy.

“These new to-go transactions are highly incremental and over-indexed at late night in the dinner day parts,” Miller said of Denny’s fledgling On Demand platform during the second-quarter earnings call in August. “With 28 percent of domestic system activity engaged with one or more delivery service provider, we anticipate continued long-term growth in our off-premise sales from the Denny's On Demand platform as more restaurants sign delivery agreements.”

In the second quarter, Denny’s swung to a profit of $8.7 million, or 12 cents a share, from a loss of $11.6 million in the prior-year period.

While delivery helped boost the brand and off-premise sales, Miller said that the service may not be available immediately at U.K. locations, though he’s confident it eventually will be offered.

“My sense of it is there will be a traditional opening and delivery would follow,” he said.

Contact Dan Orlando at [email protected]

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