Denny's gives away free breakfast

February 3, 2009 1:50:56 PM PST
Competition among casual restaurant operators heated up Tuesday, as Denny's Corp. launched free Grand Slam breakfasts in an effort to reacquaint customers with its brand and showcase its meals as value-friendly options for cash-conscious consumers. The restaurant chain was giving away the free Grand Slams, which include pancakes, eggs, bacon strips and sausage links, to any customer visiting its restaurants on Tuesday between 6 a.m. and 2 p.m.

Denny's has promoted the freebie heavily, with a 30-second ad that aired during the third quarter of the Super Bowl on Sunday, another 15-second ad during the post-game show and a full page ad in USA Today's Monday editions. The company reported 14 million hits on its Web site between Sunday night and Monday morning - the site read "service unavailable" at midday Tuesday. By late afternoon Tuesday, when the site was back up, Denny's had recorded 40 million hits since Sunday night.

With the promotion only under way a few hours, spokeswoman Cori Rice said restaurants in Miami, Washington D.C. and Los Angeles were reporting long lines and other locations said they were very busy but under control.

"From all reports, it's going extremely well," Rice said.

The Spartanburg, S.C.-based company ended the giveaway, as anticipated, having served up 2 million free Grand Slams. Rice said each restaurant was able to churn out about 130 Grand Slams an hour. Some restaurants even gave away vouchers to people waiting in long lines or wanting to return later, she said, though she did not know how many vouchers were given out.

Denny's, which has more than 1,500 locations, sells more than 12.5 million Grand Slam breakfasts a year.

Chris Oakley of Oxford, Pa., said he visited the Denny's at the Granite Run Mall outside of Aston, Pa., at 8 a.m. and waited on a line of more than 50 people for about 20 minutes before getting a counter seat.

While he visited the restaurant alone, the free breakfast was still a family affair, as Oakley said his father went to a Denny's in Florida at 6 a.m. and his brother headed to one in Buffalo, N.Y.,before going to work.

Back in Pennsylvania, Oakley said customers remained surprisingly upbeat even though they stood in a line that included 32-degree weather and snow.

"It was almost like a fair atmosphere," Oakley said.

He admitted that his reason for heading in for the Grand Slam was simple: it was free.

With consumers continuing to pull back on spending amid the recession, the breakfast market has become increasingly focused on value meals in an attempt to grab those still willing to spend but looking to get the most bang for their buck.

Starbucks Corp. plans to offer "several breakfast pairings" at "attractive" prices, according to comments made by Chief Executive Howard Schultz last week. Others fighting for a piece of the pie include McDonald's Corp., which is offering new lower-priced specialty coffee drinks, and Dunkin' Donuts, which has value-minded deals.

Rice said Denny's recognized that customers enjoy its Grand Slam breakfast, but that they can choose among several options when looking to spend their money.

"We need to compete and be in the consideration set," Rice explained.

To that end, the company said it is trying to change customers' perceptions that Denny's is only a place for a sit-down breakfast that will take a lengthy period of time. It can provide breakfasts to go as well as have food prepared within 10 minutes if customers require fast service, according to Rice.

"We understand what the customer is wanting now," she said.

Free giveaways are not something new among food operators. In November Starbucks offered a free cup of brewed coffee to anyone who asked on Election Day, while Krispy Kreme Doughnuts Inc. gave away star-shaped doughnuts. Ice cream maker Ben and Jerry's also offered a free scoop as part of a celebration of the election.

Jeff Allen, 23, spent about 45 minutes in line at a Denny's in O'Fallon, Ill., outside of St. Louis, during the lunch hour on Tuesday. He and his friend decided to leave after the restaurant gave out vouchers for a free Grand Slam later this week to anyone not wanting to wait in line. Allen said he was shocked at the turnout - about 100 people in line and a parking lot so crowded he had to park next door.

"We'll probably go back Thursday for lunch," he said, then added, "We're definitely going."

Shares of Denny's rose 4 cents to close at $1.96 on Tuesday. The stock has traded in a range of $1.18 to $4.10 over the past 52 weeks.

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AP Business Writer Emily Fredrix contributed to this report from Milwaukee.

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