Denny's Growth Isn't Happening In Its Dining Rooms

Off-premise sales continue to reign supreme at Denny’s, as the full-service restaurant chain reported double-digit sales growth in delivery and takeout orders for the second consecutive quarter.

Sales from Denny’s on Demand, the company’s off-premise delivery program, now account for nearly 11 percent of total sales at company-run restaurants, and approximately 10 percent of franchised locations. Both metrics increased 0.5 percent since Denny’s last reported earnings in July. Overall, system-wide same-store sales grew 1 percent year-over-year.

“We anticipate continued long-term growth in off-premise sales from Denny's on Demand platform as more restaurants expand their delivery channels,” CEO John Miller said on an earnings call with investors, Tuesday afternoon. He added that approximately 71 percent of Denny’s domestic system is in cahoots with at least one delivery partner.

These to-go transactions best cater to the 18-to-34-year-old adults that are driving this trend. Most orders typically come in during the dinner daypart and late night, Denny's says. In order to further maximize its profit from off-premise sales, Denny’s recently formed a new delivery partnership with Amazon Restaurants in June. It also enabled customers to start placing orders on their Amazon Echo earlier this spring.

Restaurant Redesign  

Denny’s completed 59 remodels of franchised and company-operated restaurants in the third quarter, as part of its Heritage Remodel Program launched last year. These redesigns aim to give the chain a more modern and inviting feel, John Dillon, chief marketing officer told Naiton’s Restaurant News in April. They include new hardwood floor tiles, contemporary booths and tables, and new light fixtures.

Currently, 78 percent of Denny’s stores have completed construction, with 80 percent of the company’s entire store portfolio expected to finish by the end of the year.

“Our Heritage remodel program continues to perform well, consistently receiving favorable guest feedback and generating a mid-single-digit range sales lift,” said Miller.

Denny’s also added to its store count as of this week, he added, opening 50 new locations in Canada and the Philippines. The chain has now introduced 500 new restaurants since 2009.