RealitySells

How Did Denny’s Wind Up Here?

The Super Bowl promotion that Denny’s Restaurants cooked up was a doozy: Free Breakfast for the entire country on Tuesday, Feb. 3rd from 6am to 2pm.  No strings, no hassles.  Just a free Grand Slam.  Did it re-establish the chain as the Authentic breakfast choice?  You decide.

There were lines stretching out the door and around the corner beginning long before 6 am at many Denny’s locations that morning.  They waited for over an hour in some places, but with the economy hitting some families very hard, the wait was worth it. 

USA Today quoted several Denny’s customers from around the country.  Josh Richardson, and out-of-work medical assistant in Greenville, SC, said he waited 40 minutes in 35-degree temperatures for his Grand Slam.  “It’s definitely a blessing,” he said.  “I’ve put in applications everywhere—Wal-Mart, Kmart.  I havent heard nothin’.” Denny’s estimates that 2 million free Grand Slams were served nationwide on that day, and many people were very appreciative. 

One of the original value-priced breakfast restaurants, Denny’s was founded in the early 1950’s in Lakewood, CA as a clean, dependable, 24-hour coffee shop.  At that time, the only others in the category were the Howard Johnson’s chain, one-location locals, and a handful of others.  According to USA Today, the chain went public in 1966, and had almost 200 locations in two years.  By 1981, the number had grown to more than 1,000, but others were starting to creep in on their turf.

Fast-food giants like McDonald’s began serving breakfast, and by the mid-1980’s, Denny’s was undergoing an identity crisis.  “Who is Denny’s?” was the overarching question amid all the competition.  Comedian Jerry Seinfeld poked fun at the chain in one of his deadpan jokes: “No one actually decides to go to a Denny’s.  You just end up there.”

Denny’s found themselves in a difficult position.  Things had changed around them, and finding their new Authentic self wasn’t easy. 

Denny’s CEO, Nelson Marchioli, has been thinking about that for the past eight years, ever since he took the top spot in 2001.  When he first started to visit stores back then, he saw a chain in disarray.  Service was unpredictable, the food was less than memorable, and he had a lot of work to do.  “The thing was in a ditch,” he said. 

After several improvements, he felt as though he was ready to unveil the “new” Denny’s to the American public in a big way, with an age-old technique called sampling. 

The whole promotion, including the 30-second Super Bowl ad, cost Denny’s an estimated $5 million, but its value in publicity and exposure has been calculated by many Madison Avenue ad experts at $50 million or better.  Their new positioning line is, “Real Breakfast, 24/7.” Their ads spoof places like IHOP that squirt clown faces on pancakes, and make a case for a genuine, hearty, value-priced American breakfast without the foofy whipped cream. 

Are they on their way back?  In an era of Authenticity, I believe Denny’s is a great case study in Transparency, and has positioned themselves sunny-side up for the future.