SPARTANBURG S.C. Amid slumping sales and shareholder unrest, Denny's will debut on Saturday its first national value menu with prices more associated with the quick-service segment than a full-service family-dining chain.
The "$2 $4 $6 $8 Value Menu" offers 16 menu items at various prices that will be available all day, Denny's said Wednesday. Items range from biscuits and gravy with hash browns or an egg for $2 to an $8 lemon-pepper chicken with two sides, bread and a drink. Click here to see the complete menu.
Denny's, which boasts about 1,500 restaurants, began testing the menu last December in six test markets in the West, including California.
Nelson Marchioli, president and chief executive of Denny's Corp., said the value menu is the result of customer demand for hearty food in a full-service atmosphere, but with fast-food prices.
"The new $2 $4 $6 $8 offering redefines the concept of traditional value menus, moving consumers beyond the idea that fast food is their only affordable option," he said.
John Dillon, Denny's vice president of marketing, said the menu has so far garnered positive response from consumers. However, at least one securities analyst that follows Denny's has expressed concern that the chain still needs a top-line catalyst to compete and move sales in a more positive direction. Denny's recently posted a same-store sales decline of 6.1 percent at corporate units and 7.2 percent at franchised units for its fourth quarter.
"[Denny's] appears to be hanging its hopes on [the] value promotion É but we do not see this as a catalyst, and we think promotions like this one could position [Denny's] for a potential margin squeeze in future quarters," said Stephen Anderson, a senior analyst with MKM Partners.
Denny's other marketing and sales-building strategies included two Grand Slam Giveaways.
Denny's management has also come under fire from a group of shareholders, who criticized the expensive giveaway promotions and pointed to the company's more than 50-percent decline in share price during the past five years.
The shareholders, which collectively own 6.5 percent of Denny's common stock, said they would nominate three outside executives to the company's board at the next shareholder meeting, which is scheduled for May 19.
The group said it would look to change Denny's leadership, halt the sale of corporate restaurants at low prices, restore unit growth, create a pay-for-performance culture, and reduce operating expenses by at least $15 million.
Contact Elissa Elan at [email protected].