Overview of the dive:
The multitude of CEO changes in the restaurant industry may reflect a growing sense of confidence in the stability of the market. Outgoing executives from Darden, El Pollo Loco and Starbucks are all retiring, and Kevin Johnson, the coffee chain’s former CEO, told Starbucks’ board in 2021 that he would retire when “the global pandemic would come to an end”.
The change of custody of Tacos de Torchy also followed a retirement of the CEO, and the position of general manager of Chick-fil-A passed from Dan Cathy to his son, Andrew Truett Cathy.
Miller served a particularly long tenure as CEO of Denny, taking office in January 2011. He relinquished the title of chairman in February 2020, which is now held by chief financial officer Mark Wolfinger.
Like most casual chains, Denny’s was hit hard by dining room closures and restrictions early in the pandemic. But the restaurant adapted to emerging growth opportunities under Miller as its business stabilized. In January, Miller announced that Denny’s would launch two virtual brands this year to increase market share. The Burger Den was rolled out in February to at least half of the chain’s national locations, and The Melt Down launched this spring in about half of its stores in the United States.
“We believe that our oversized industry will experience unfortunate and significant seating rationalization during the pandemic, largely at the expense of independent and full-service operations. We do not celebrate this prediction, but we do believe that brands that survive will have the opportunity to gain market share,” Miller said during an ICR presentation in January.
This investment in digital commerce builds on Denny’s offsite earnings. The chain more than doubled its weekly offsite sales from its pre-pandemic business, when average weekly offsite restaurant sales were $4,000, Miller said during the ICR presentation. . During the company’s fourth quarter 2021 earnings call in February, he said The Burger Den and The Melt Down had sustained “high off-site sales volumes.”
Denny’s also announced a partnership with Reef Technology in January to offer delivery from ghost kitchens in urban markets where the company is under-penetrated. The companies did not specify in which markets these units will be placed, or how many locations Denny plans to create with Reef.
Expanding its footprint through shadow kitchens could allow the company to expand its presence at a reduced cost compared to traditional brick-and-mortar growth, building on its sales momentum. For fiscal 2021, Denny’s revenue jumped 38% to $398.2 million and national same-store sales increased 41.1% from 2020, but declined 4.7% compared to 2019. The company also opened 12 national franchise restaurants last year and completed the renovation of nine stores. .