In a post-pandemic world, no restaurant category has gone through quite as much of an evolution as casual and family dining. The breakfast category in particular is undergoing a transformation, as new Denny’s CEO Kelli Valade knows. Valade spoke about the evolution of family dining— including the brand’s new acquisition of Florida-based Keke’s Breakfast Café, labor challenges, and operations changes — during the last CREATE Live Digital Learning Session of 2022 with NRN Senior Editor Ron Ruggless.
Valade joined Denny’s about six months ago from Red Lobster, where she served as CEO for a little over a year, and has held other leadership positions at BlackBox Intelligence and Chili’s. She has overseen the acquisition and synergy of Keke’s Breakfast Café—an emerging breakfast restaurant based in Florida that’s part of a growing trend of scrappy breakfast and brunch concepts that close after lunch. Keke’s higher ticket and shorter business hours fit in well with the stalwart 24-hour experience of the Denny’s brand.
“Everyone knows family dining restaurants: you grow up with them, you take your kids and they are a staple that people count on,” Valade said. “[…] Denny’s turns 70 soon and there’s a lot to love and protect, and now we brought in this new breakfast category with a shorter day that’s exploding. When I came in, I asked, ‘Are we sure they’re not too close together? We broth serve pancakes.’”
But as it turns out, Keke’s has been able to round out the Denny’s demographic with a more suburban, higher income target audience and of course, since the brand is regional, the plan is eventually to “grow it like crazy,” Valade said. However, Denny’s can’t just rely on Keke’s for a fresh new take on the breakfast category. The 24-hour model has changed over the past few years as labor shortages and higher expenses force restaurants to shorten their hours.
“The 24/7 model has been tough, though we keep opening more restaurants every day,” Valade said. “We knew the journey back to joy would get us back to [sitting around a table again]. Late night was one of the slowest dayparts to come back […] But there is unique equity in the 24/7 model and we are working on getting them staffed fully for all dayparts.”
Unsurprisingly, Valade said that labor shortages were top of mind for the company as it looks toward the future, and tries to assess and triage where (and what hour of the day) staffing shortages seem to persist. In the meantime, Denny’s has invested in technology for both front and back of the house to assist with any of these challenges, like Sunny the robot who busses tables, and Denny’s is also looking into new handheld and QR code technologies to make server jobs even easier.
“There was incredible technology adoption during the pandemic and people of all ages won’t unlearn that, so we use it where we can,” Valade said. “So there’s less worry about guest experience being compromised [by technology].”
Although Valade is not worried about guest reaction or pushback against automated technology, there is concern around rising guest expectations which can sometimes be even higher than the pre-pandemic days. Guests are also changing in how they’re approaching dayparts, especially since the work from home model is still so prevalent for many former office workers.
“Before the pandemic, breakfast had been growing in general,” Valade said. “But now other dayparts like the midafternoon daypart has been growing, and there’s opportunity not just for happy hour drinks, but for mid-afternoon coffees.”