Denny’s at a Strategic Crossroads Investor Returns vs. Customer-Centric Survival

 

Denny’s, one of America’s most recognizable diner brands, stands at a critical inflection point according to Steven Johnson Grocerant Guru® at Tacoma, WA  based Foodservice Solutions®. With more than 1,600 locations worldwide, the company benefits from its longstanding heritage, high franchise penetration, and brand familiarity. Yet, the dynamics of foodservice are shifting: inflation, generational preference changes, and rising labor costs challenge traditional casual dining models.

Let’s examine Denny’s through three lenses:

1. Attractive factors for activist investors.

2. Risks and barriers to investment.

3. Customer-focused insights from the Grocerant Guru.

Section 1: Six Reasons Activist Investors May See Value in Denny’s

1 All-Day Breakfast Leadership ‒ Over 60% of consumers want breakfast beyond morning hours; Denny’s has a defensible advantage.

2 Compelling Value Proposition ‒ 47% of diners cite 'value for money' as their top decision factor. Denny’s value menus meet this demand.

3 Late-Night Differentiation ‒ Nearly 20% of U.S. restaurant traffic occurs after 8 p.m., where Denny’s 24/7 model dominates.

4 Digital Growth Trajectory ‒ Off-premise dining makes up 25% of sales, growing double digits annually.

5 Franchise-Led Resilience ‒ 95% of restaurants are franchised, providing stable royalty streams with lower risk exposure.

6 Menu Innovation Success ‒ Limited-time offers drive repeated traffic spikes and brand engagement.

 

Section 2: Six Challenges That May Discourage Investment

1 Declining Guest Traffic ‒ Traffic erosion mirrors casual dining’s overall decline.

2 Generational Disconnect ‒ Only 18% of Gen Z see Denny’s as a preferred dining option.

3 Labor Model Vulnerability ‒ Staffing shortages threaten the 24/7 model’s viability.

4 Margin Compression at Franchisee Level ‒ Rising costs outpace pricing flexibility.

5 Competitive Encroachment ‒ QSRs like McDonald’s and Wendy’s expand into breakfast, squeezing Denny’s.

6 Capital Allocation Concerns ‒ Share buybacks prioritized over reinvestment in remodels and experience.

 

Section 3: Six Grocerant Guru Insights ̶ Why Customer Focus Outweighs Investor Priorities

1 Convenience as Core Currency ‒ Customers value availability over financial engineering.

2 Value Above Margin ‒ Affordable pancakes matter more to diners than investor-optimized margins.

3 Personalization over Standardization ‒ Diverse menu needs outweigh cost-cutting pressures.

4 Experience First, Efficiency Second ‒ The Denny’s 'third place' experience is culturally valuable.

5 Generational Relevance is Critical ‒ Winning Gen Z and Gen Alpha matters more than short-term EPS.

6 Dining as Lifestyle Identity ‒ Trust and cultural relevance precede sustainable shareholder returns.

 

Think About This:  Denny’s represents both opportunity and challenge. Its franchising model, value leadership, and brand recognition provide an attractive foundation. However, structural headwinds declining traffic, generational misalignment, and rising operating costs pose material risks to long-term investor returns. The Grocerant Guru’s perspective reframes the debate: sustainable shareholder value cannot be engineered without customer relevance. In the evolving food landscape, customer-centric reinvention must precede investor reward. Denny’s future depends on bridging its legacy with next-generation dining expectations.

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter

Starbucks’s 2% Raise: A Bitter Sip of Corporate Hypocrisy

 

Once the gold standard in foodservice employment—thanks to benefits like health care for part-timers, tuition help, and above-industry wages—Starbucks now serves something far more bitter. With U.S. inflation at around 3.7%, their paltry 2% raise for salaried workers deepens the wage squeeze, delivering not an uplift—but a pay cut in real terms.

Real Pay Cut in Disguise

·       2% raise vs. 3.7% inflation = 1.7% loss in buying power for employees already stretched thin.

·       Over time, even that modest raise compounds—potentially bridging into 11%, 13%, or even 17% cost increases for the company. Yet workers still fall further behind their cost-of-living.

·       The wage increase rings hollow when the CEO’s compensation dwarfs it by orders of magnitude.

 

CEO Pay That Makes the Raise Look Pitiful

While employees barely tread water, Starbucks is splurging on executive pay. Let’s break down what Brian Niccol is really earning:

·       $5 million signing bonus awarded just one month after starting the job.

·       Total compensation in just his first four months: approximately $95.8 million, primarily composed of stock awards.

·       More detailed breakdowns show:

o   Base salary: roughly $61,538

o   Stock awards: around $90 million

o   Additional perks—temporary housing ($143K), private jet commute ($72.4K), personal aircraft use ($19K), COBRA insurance reimbursement, legal fees, corporate chauffeur & personal security—bringing his total to near $96 million.

·       On top of that, his hiring deal also included:

o   A $10 million upfront cash sign-on bonus

o   Equity awards valued at $75 million, plus a base salary of $1.6 million, annual cash incentives up to 225–450% of that salary, and potential yearly equity awards of $23 million.

·       All told, Niccol’s 2024 total compensation hit $97.8 million—a jaw-dropping 6,666 times the median pay of a Starbucks barista.

These numbers stand in stark contrast to the company's message to employees: “We value you.” Instead, it's clear—employees are now seen as liabilities to be minimized, while executives are treated like royalty.

 

Unions and Backlash: Workers Aren’t Buying It

Criticism has not been subtle. The union representing Starbucks workers has pushed back hard—including strikes at 300+ stores—citing Niccol’s multimillion-dollar compensation while workers demand a livable wage ($20/hr minimum) and fair contract negotiations.

Senator Bernie Sanders slammed the pay disparity, stating:

“If you’re the Starbucks CEO you get $96 million for four months of work … the CEO is refusing to give you a decent raise to pay rent and buy groceries.”

 

How Does It Look? Spoiled Latte vs. Flat Espresso

Employee Raise	CEO Compensation
2% (lagging inflation)	$96M+ in 4 months + lavish perks
“Partners appreciated”	Executives worshipped
Minimal morale boost	Major public outrage

A brand built around “partners” has morphed into a corporate giant that values stock grants more than the people brewing the coffee.

 

Think About This: Starbucks Pouring Out the Workers’ Trust

That 2% raise feels more like a punitive drip than a kind gesture—especially when compared to Niccol’s nearly $100 million paycheck and perks. The company that once prided itself on employee care now signals: you’re a cost burden, not a cherished partner.

Success Leaves Clues—Are You Ready to Find Yours?

One key insight that continues to drive success is this: "The consumer is dynamic, not static." This principle is the foundation of our work at Foodservice Solutions®, where Steven Johnson, the Grocerant Guru®, has been helping brands stay relevant in an ever-evolving market.

Want to strengthen your brand’s connection with today’s consumers? Let’s talk. Call 253-759-7869 for more information.

Stay Ahead of the Competition with Fresh Ideas

Is your food marketing keeping up with tomorrow’s trends—or stuck in yesterday’s playbook? If you're ready for fresh ideations that set your brand apart, we’re here to help.

At Foodservice Solutions®, we specialize in consumer-driven retail food strategies that enhance convenience, differentiation, and individualization—key factors in driving growth.

👉 Email us at Steve@FoodserviceSolutions.us
👉 Connect with us on social media: Facebook, LinkedIn, Twitter

Casey’s Evolving Success with Migrating Consumers

 

The convenience store landscape has undergone a dramatic transformation over the past two decades, evolving from a quick stop for fuel and packaged snacks to a robust competitor in the foodservice industry according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Leading the charge in this evolution is Casey’s General Stores, a company that has strategically embraced the grocerant model—blending the convenience of a grocery store with the meal solutions of a restaurant. With a strong focus on high-quality prepared foods, particularly pizza, and an aggressive unit expansion strategy, Casey’s is capturing a growing customer base seeking mix-and-match meal solution.

A Historical Perspective on Casey’s Shift to Foodservice

Founded in 1968, Casey’s started as a small-town convenience store providing essential goods to rural communities. By the 1980s, the company recognized that foodservice was becoming a critical differentiator in the industry, particularly in smaller markets where dining options were limited. The introduction of Casey’s signature pizza in 1984 was a pivotal moment, setting the stage for its long-term success in prepared foods.

While many convenience stores traditionally relied on pre-packaged sandwiches and microwaveable burritos, Casey’s took a different approach—investing in fresh, made-to-order food. Over the next few decades, the company continued expanding its menu, adding breakfast pizza, bakery items, and eventually full meal bundling options. Today, Casey’s is the fifth-largest pizza chain in the United States by store count, a remarkable achievement for a company that started in fuel and packaged goods.

Expanding Share of Stomach

Pizza and Meal Bundling Driving Incremental Sales Growth

Pizza has remained the cornerstone of Casey’s foodservice success, consistently driving sales and customer loyalty. According to industry data, nearly 80% of Casey’s customers who purchase a pizza also buy additional items, reinforcing the strength of its bundling strategy. With meal bundling becoming an essential part of consumer purchasing habits, Casey’s has integrated complementary offerings like breadsticks, wings, and desserts, elevating its check average while enhancing customer value perception.

The results speak for themselves. In the third quarter of fiscal year 2025, Casey’s reported a 4.7% increase in same-store prepared food and dispensed beverage sales, with hot sandwiches seeing a 50% surge and bakery items growing nearly 10%. This growth is largely attributed to Casey’s ability to bundle fresh meal components into attractive value deals, which keep customers returning. The introduction of new chicken wings and fries further supports Casey’s efforts to create mix-and-match meal options catering to a variety of consumer preferences.

Expanding the Store Footprint and Capturing New Markets

While menu innovation is a critical factor, Casey’s unit growth strategy is equally impressive. The company has aggressively expanded, increasing its store count to approximately 2,900 locations across 17 states. The 2023 acquisition of 198 CEFCO convenience stores marked Casey’s most significant deal to date, bringing 148 new stores in Texas and an additional 50 in Alabama, Florida, and Mississippi. This expansion into the South presents new opportunities to introduce its signature pizza and bundled meal solutions to a broader audience.

Casey’s has long focused on rural and suburban markets, a strategy that has proven effective as traditional grocery stores struggle with rising operational costs. By positioning itself as a go-to destination for both fuel and fresh food, Casey’s continues to build a strong community presence, particularly in areas where quick-service restaurant options are sparse.

The Grocerant Model: A Future-Proof Strategy

The rise of the grocerant niche aligns perfectly with Casey’s growth strategy. As more consumers migrate away from traditional sit-down restaurants and toward quick, customizable meal solutions, convenience stores that offer high-quality prepared foods stand to gain significant market share. The data supports this shift—according to NACS, foodservice has now surpassed cigarettes as the leading revenue category in convenience stores, a trend that is expected to continue.

Casey’s has embraced this shift by focusing on fresh, restaurant-quality offerings while leveraging its existing convenience store infrastructure. With a well-established brand reputation for quality pizza and growing consumer demand for bundled meal deals, Casey’s is well-positioned to capitalize on the next wave of convenience-driven dining trends.

Looking Ahead: Continued Innovation and Growth

As Casey’s moves forward, the company’s commitment to food innovation, operational efficiency, and strategic expansion will remain central to its success. The company has achieved 11 consecutive quarters of reduced same-store labor hours, a testament to its ability to optimize operations while maintaining strong customer satisfaction scores.

With plans to add another 350 stores by the end of fiscal year 2026, Casey’s is poised to continue its dominance in the grocerant niche. By staying ahead of consumer trends and reinforcing its reputation for fresh, high-quality prepared foods, Casey’s is not only evolving but leading the industry into a new era of convenience-driven dining.

The success of Casey’s highlights a broader industry trend: the rapid transformation of convenience stores into foodservice powerhouses. As consumer migration continues to favor ready-to-eat and heat-and-eat meal solutions, Casey’s stands as a prime example of how a retailer can adapt, innovate, and thrive in an ever-changing market.

Success Leaves Clues—Are You Ready to Find Yours?

One key insight that continues to drive success is this: "The consumer is dynamic, not static." This principle is the foundation of our work at Foodservice Solutions®, where Steven Johnson, the Grocerant Guru®, has been helping brands stay relevant in an ever-evolving market.

Want to strengthen your brand’s connection with today’s consumers? Let’s talk. Call 253-759-7869 for more information.

Stay Ahead of the Competition with Fresh Ideas

Is your food marketing keeping up with tomorrow’s trends—or stuck in yesterday’s playbook? If you're ready for fresh ideations that set your brand apart, we’re here to help.

At Foodservice Solutions®, we specialize in consumer-driven retail food strategies that enhance convenience, differentiation, and individualization—key factors in driving growth.

👉 Email us at Steve@FoodserviceSolutions.us
👉 Connect with us on social media: Facebook, LinkedIn, Twitter

Mezli Tomorrows Restaurant Today

 

At the intersection of robotics technology, restaurants, cloud computing, fresh fast food, and labor saving solutions is a new retail restaurant called Mezli.  According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® “Mezli is ushering in a new platform for growth in both urban and rural locations.”.  

A recent article about Robotic technology stated that at retail robotic technology is not itself a new trend, but summer 2022 saw one quick service retailer leveraging robotic automation in a very novel way. “Mezli, a fully-autonomous robotic restaurant that resembles a large refrigerated container, opened in the Spark Social food park in San Francisco in August. The high-tech eatery is described by its founders as the “first of its kind in the world.”

While other automated restaurants have opened in San Francisco and other select locations, Mezli is the first to offer a customizable, hot menu to customers— with no on-site workers, according to its founders. (Staffers will load the pre-prepared ingredients into the site once a day.) 

The automated approach, which significantly cuts labor costs, will allow Mezli to offer its menu of Mediterranean grain bowls, sides and beverages at a significantly lower price point than similar fast-casual restaurants, the company said. In addition to the ready-made bowl offerings, customers using touchscreens can assemble their own from available ingredients, creating around 64,800 possible combinations. Now once again empowering consumer choice, but we wonder if that is just a bit to much choice?

Yes, there is more technology, in June, global fast-fashion retailer H&M Group began partnering with Google Cloud to leverage the platform’s data analytics capabilities and global enterprise in an effort to enhance its customer experience and supply chain operations.

Now this cloud-based enterprise data backbone will include a core data platform, data product, and advanced artificial intelligence (AI) and machine learning (ML) capabilities. H&M also plans to establish of a new data mesh to make all types of data and events more accessible from multiple sources, including in-store, online, and third-party brands and suppliers. 

Then as its enterprise cloud partnership with Google develops, the retailer hopes to optimize its internal supply chains. The company also intends to obtain the ability to deliver next-generation customer experiences across a variety of physical and data sales channels. In addition, H&M wants to enable further development of data science and AI capabilities throughout its global enterprise.

Even grocery stores are using an increasingly innovative variety of smart technologies to cut food waste by improving in-store freshness. In July, Wisconsin-based regional grocer Festival Foods announced it was ensuring food safety and minimizing shrink with Internet of Things (IoT) technology.

The retailer utilizes Bluetooth IoT sensors from SmartSense to automatically and continuously monitor the temperature of coolers, refrigerators, and chilled cases in all of its stores. Festival Foods placed SmartSense Bluetooth IoT sensors in all chilled and frozen product shelving units in all of its stores.

The Bluetooth sensors continuously take in temperature data, which is then transmitted to gateways that collect the data and send it to a centralized SmartSense database. Gateways operate with battery backup and cellular technology, so that even in the event of a power or network outage, they can still collect and transmit data in real time.

Restaurants, retail, and grocery are all leveraging technology more and more.  Does your brand look more like yesterday or tomorrow?

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter

In a Battle for Share of Stomach

Technology Helps