The final Denny’s restaurant in San Francisco has closed its doors permanently after 25 years of operation.
Located in the city’s bustling Union Square district, this 24-hour establishment served its last meal on August 1, unable to withstand the rising crime rates that have affected the area, contributing to its downfall.
Over Seventy Closures Nationwide
Denny’s has been shrinking its presence nationwide, having closed over 70 of its restaurants in the past two years, with 15 closures occurring this summer alone.
This pattern reflects broader challenges within the fast-casual dining industry, which is facing numerous pressures from various fronts, reshaping the landscape for even well-established brands like Denny’s.
A Quarter Century of Service Ends
The Union Square Denny’s was not just a restaurant but a fixture in the area for a quarter of a century.
“The restaurant operated until the last day that we could,” franchise operator Chris Haque told the San Francisco Gate, emphasizing the commitment to serving the community until the very end.
Rising Crime and Dining Challenges
The franchise faced significant challenges with rising crime in downtown San Francisco. Frequent incidents of ‘dining and dashing’ were particularly damaging.
Haque described the situation, saying, “There’s vandalism, and people come and eat and walk away, and there’s no one to stop them.”
Affection for San Francisco Remains
Despite the closure, the love for San Francisco remains strong among the restaurant’s operators. Haque expressed his fondness for the city, saying, “It’s a beautiful city – we love it, we have been there so many years.”
However, he also voiced a desire for a more business-friendly environment from city officials.
The Impact of Declining Conferences
The decline in business from conferences and conventions, which plummeted during the pandemic, has also severely impacted the restaurant.
The slow recovery of in-person business events has further strained the ability of businesses like Denny’s to sustain their operations in affected areas.
Denny’s Corporate Response
Regarding the closure, Denny’s corporate office shared their sentiments, echoing the local operator’s feelings about the city and the tough decision to close.
They said, “We echo Chris Haque’s sentiments that Denny’s loves San Francisco and the Bay area, and closing a restaurant location is never an easy decision.”
National Reduction in Restaurant Numbers
This closure is part of a larger trend of Denny’s reducing its number of locations across the U.S.
Recent months have seen similar closures in places like Bucks County, Pennsylvania, and Ashland, Ohio, as the company reassesses its operations strategy amidst a changing economic landscape.
Economic Pressures Intensify
Rising operational costs due to inflation have been a significant concern.
Denny’s executive vice president and chief financial officer, Robert Verostek, detailed that the breakeven point for a restaurant to remain open had jumped from $1 million to $1.2 million due to higher costs for food and wages.
Engaging in the Value Wars
In an effort to attract more customers amid economic pressures, Denny’s has introduced more competitive pricing strategies.
This initiative is part of the broader ‘value wars’ within the industry, as chains strive to offer more for less to draw in budget-conscious diners.
Applebee’s Competes with Value Deals
Applebee’s, facing similar challenges, has launched a competitive pricing strategy with its ‘Whole Lotta Burger’ and fries priced at $9.99.
This pricing is aimed at enticing customers who are looking for better value due to tightening budgets.
Chili’s Steps Up with Budget-Friendly Meals
Chili’s has also entered the fray with its own value meal, offering a $10.99 burger meal.
This strategic pricing undercuts some fast-food chain offerings and is designed to attract diners looking for substantial meals at affordable prices, reflecting a strategic shift in the casual dining sector to accommodate changing consumer preferences.
