In a significant shakeup for the U.S. restaurant industry, Hooters and Denny’s have announced the closure of nearly 290 locations nationwide, citing declining foot traffic, rising operational costs, and shifting consumer preferences. The move represents one of the most substantial retrenchments in the casual dining sector in recent years, raising concerns about the long-term sustainability of traditional sit-down restaurant chains.
A Major Setback for Casual Dining
For decades, Hooters and Denny’s have been fixtures in American dining—Hooters known for its sports-bar atmosphere and signature wings, and Denny’s as a 24-hour diner catering to families and late-night customers. However, both brands have struggled to adapt to a changing market where consumers are increasingly favoring convenience, affordability, and digital-driven dining options.
Hooters plans to close approximately 150 locations, while Denny’s will shutter nearly 140, marking a major contraction for both chains.
What’s Behind the Closures?
Several factors have contributed to the decline of both restaurant brands, reflecting broader challenges in the casual dining industry:
1. Changing Consumer Preferences and Declining Foot Traffic
Hooters, once a dominant force in the sports-bar space, has struggled to attract younger consumers. Analysts suggest that its brand, which was popular in past decades, no longer resonates as strongly with modern dining trends. Meanwhile, Denny’s has seen a sharp decline in late-night traffic, as younger customers opt for fast-casual chains and delivery services instead of traditional sit-down restaurants.
2. Post-Pandemic Economic Pressures
While the restaurant industry experienced a brief post-pandemic boom in 2022 and 2023, the resurgence was short-lived. Inflation, rising rent costs, and increased wages have squeezed profit margins for casual dining chains. Denny’s, which relies on a 24-hour business model, has faced especially steep costs in maintaining round-the-clock operations, leading to scaled-back hours and closures.
3. Mounting Debt and Competitive Challenges
Financial struggles have compounded problems for both brands:
- Denny’s franchisees have faced growing debt, making it difficult to sustain underperforming locations.
- Hooters has lost market share to competitors like Buffalo Wild Wings and upscale sports lounges that have modernized their dining experience to attract younger crowds.
Industry Experts Weigh In: Is Casual Dining in Decline?
The closures at Hooters and Denny’s highlight broader struggles across the casual dining sector. Industry analysts suggest that traditional sit-down chains must reinvent themselves or risk further decline.
“Consumers today prioritize convenience, affordability, and healthier menu options,” said Mark Callahan, a restaurant industry analyst. “Casual dining chains are struggling because younger diners prefer fast-casual restaurants, delivery, or takeout that offer quicker service and more flexibility.”
What’s Next for Hooters and Denny’s?
Despite the closures, both brands are implementing strategies to adapt to changing market dynamics:
- Hooters is shifting focus to international expansion, where the brand remains popular, while also exploring digital-first ordering and takeout options to appeal to modern diners.
- Denny’s is revamping its remaining U.S. locations, emphasizing breakfast and family-friendly dining, while reducing late-night hours in select markets to cut operational costs.
The Future of Casual Dining
With consumer habits shifting toward fast-casual, digital ordering, and hybrid dining models, traditional sit-down restaurants face a crucial inflection point. Brands that successfully adapt to changing consumer behaviors may find a way forward, while those that fail to modernize could struggle to survive.
For now, fans of Hooters and Denny’s will have fewer locations to visit, but whether these chains can successfully evolve in a rapidly shifting restaurant landscape remains uncertain.
