IHOP to close nearly 100 locations in the coming months

With people working from home —and eating at home — IHOP said in-store sales are down.
/ Source: TODAY

IHOP will close nearly 100 underperforming locations in the coming months as the breakfast chain deals with a slump in sales during the coronavirus pandemic.

A spokesperson for DINE Brands, the parent company of IHOP, told TODAY Food that the chain is "optimistic" about the continued improvement in sales, including to-go orders.

"While we do anticipate a minimal amount of closures over the course of the balance of the year, we are confident that we will eventually replace these severely underperforming locations with better performing restaurants that have volumes closer to pre-COVID levels," the spokesperson said.

It's unclear which locations were labeled underperforming and will be closed. IHOP's comparable restaurants were down 23.5 percent during the third quarter, the company reported on Wednesday.

"The brand's performance continued to be impacted by the effects of governmental mandated restrictions on dining room operations and soft traffic across day parts, as consumers continue to mainly work from home," IHOP president Jay Johns said in a call with investors on Wednesday. "I'd like to highlight that the overall breakfast category in general remains challenged, as the morning meal has been often times replaced at home, due to the diminished work transit."

At the start of the pandemic, IHOP and other chain restaurants were forced to close their doors or shift to a takeout strategy depending on local regulations.

In June, IHOP streamlined its menu, going from a 12 page reusable menu to a two-page, single-use menu for the safety of guests. While some items, like the Simple and Fit omelet are no longer on the new menu, it's still possible to customize an order to get something similar.

The pandemic has affected the business of big chains like IHOP and small, mom and pop restaurants. A survey released by the National Restaurant Association last month found that 100,000 restaurants have closed on a permanent or long-term basis in the U.S.

That’s nearly 1 in 6 restaurants and more than 3 million employees out of work.