I do not know a single millennial that does not appreciate the homey feeling of eating at a diner. This comes as no surprise to me.
— Danni Santana
Don’t look now, but millennials are slowly making Denny’s cool again.
The generation’s obsession with delivery has led to a spike in sales, particularly at breakfast and late-night hours, according to Mike Wolfinger, Denny’s chief administrative and financial officer.
Denny’s said nearly a quarter of transactions across all dayparts (the brand defines four, including late night) are tagged for delivery or takeout. In fact, dine-in orders surpass delivery orders only during lunch hours. Unsurprisingly, delivery is significantly more popular late at night, with 8 percent more orders fulfilled online than in-store.
“Our Denny’s on Demand platform has enabled us to modernize the brand with increasing relevance among younger guests,” said Wolfinger, during a presentation at the Bank of America Merrill Lynch 2019 Consumer & Retail Technology Conference in New York on Wednesday. “We believe the convenience of online ordering and payment options for pickup or delivery represent a growing opportunity to expand Denny’s relevance with young families at dinner and breakfast.”
Off-premise continues to hang around 11 percent of total net sales for the self-described family dining chain. That figure is up from 7 percent of sales when Denny’s first launched its delivery platform in 2017. Adults aged 18 to 34 place just over half of all off-premise orders.
Upwards of 70 percent of Denny’s domestic store system is actively engaged with at least one delivery partner, CEO John Miller said on the company’s fourth quarter earnings call.
Millennials Dine In Too
Aside from off-premise improvements, Denny’s Heritage Remodel Program and ongoing menu simplifications have resonated with consumers, Wolfinger said.
The company began remodeling its diners back in 2014 with new wood floors, contemporary color schemes, and furniture that appeals to a younger demographic. The result has been mid-single digit sales lifts at all meal times, with the largest increase coming at dinner. About 90 percent of Denny’s locations will sport the new look by the end of the year.
On the food front, 80 percent of Denny’s dine-in menu has been changed since 2011. That has led to eight consecutive years of system-wide sales growth. While these efforts largely concentrated on breakfast and lunch, Denny’s has begun enhancing its dinner options with offerings, such as its Mediterranean Grilled Chicken and the Garlic Peppercorn Sirloin.
“Family dining is in a bit of resurgence right now,” said Wolfinger. “The millennial generation is growing up. And so their taste, their interest, I think, matches up very well [with us], whether it’s off-premise or the changes we made in our physical image through Heritage.”