Chain Leader Live has just wrapped up its conference in Atlanta.  As usual, it was an impressive program of speakers, panels and keynoters. Julia Stewart of DineEquity spoke this morning about the leadership challenges of a tough economy on our industry. The biggest surprise for many in the room was the determined way that Denny’s has set out to own the late night daypart.

Several chains are open late. A few are open for 24 hours. Many get the late night business simply because they are open, not because they have specifically targeted a late night customer. Denny’s has set its sights on being the go-to brand for young adults who are not quite ready to call it a night after a late night out. In their approach, Denny's has unleashed a coolness that has often been lacking from this “Always Open” brand.

For those of you who dine at normal hours, the 10 p.m. to 5 a.m. daypart (late night) might be somewhat of a culture shock to you. It is comprised of shift workers appreciative of a place to sit down and eat late, and people, mostly young, who are not quite ready to call it a night just because the bar or club they were in has closed for the evening. As Andrew Dismore, Denny’s Senior Director of Product Innovation, describes it, the brand wants to be the place for young adults “to keep the party going” and “keep the group together”. They have launched a comprehensive program to appeal to the 18-24 year old customer.

In early summer of this year, Denny’s launched its late night menu of four new menu items and four new value items, all served exclusively from 10 p.m. to 5 a.m. Denny's based the development of its new All Nighter menu on feedback from focus groups and taste test studies with consumers ages 18 to 24. It was a good start, but not quite enough to move the needle into the “cool” range.

The second element of the program charts new territory. Denny’s has always been popular with emerging bands for an after-gig meal, and a place to wind down after performing. Established bands can ask their favorite restaurants to accommodate them by staying open late. Emerging bands have to go to places that are already open late, and that they can afford.

To expand its late-night menu, Denny's asked the bands Taking Back Sunday, Plain White T's, Eagles of Death Metal and The All-American Rejects to help the chain create new dishes that were rolled-out late this summer in a Rock Star Menu. They worked with each group in a Denny’s kitchen and developed a menu item that the band members collaborated on and named. In addition, the Denny’s staff changes into jeans and black T-shirts for the All-Nighter daypart. Alternative music is played from 11 p.m. to 5 a.m.

         
                                       

Denny’s has just unleashed its second round of band-created menu items for its Rock Star Menu 2 this month with musicians Katy Perry, Boys Like Girls, Hoobastank, and Taking Back Sunday (again). In addition, Denny’s will also help feed emerging bands currently on tour with its “Adopt-A-Band” program. Bands can enter to become an Adopted Band through the Denny’s online music site. The band then asks its fan base to vote them into a selection of bands that will receive free meals and promotional support from Denny’s.

Almost half of Denny’s late night customers are under 24. Two thirds are not coming from work or home, but from bars, clubs and other late night venues. A majority of the late night customers are male, so the menu items developed by these mostly male bands are right on target. Denny’s estimates that a 5% boost in its late night business would yield it $26 million in sales. It seems to be working. Early reports are that they have managed to turn a 2% decline in the late night daypart to flat or better. This is a strong result in a weakening economy with a still new program.

It would have been easy to have rolled out a few new menu items for late night and not rocked the boat. There will no doubt be some defections from the late night customer base from those who are older and in a Denny’s because of their late work hours. Kudos to Denny’s for not playing it safe, and not trying to be all things to all people. All signs are that this return to cool could be a Grand Slam for this 50 year old brand.