Subway Going Downhill

Just a few years ago, the Subway chain was a fast-food dynamo. For example, see Eat Fresh at Subway and Fastest-Growing U.S. Franchisors. Even today, there are nearly 44,000 franchised outlets around the world, with 25,000 stores in the United States.

But Subway is now in a tough situation. As Josh Kosman reports for the NY Post:

“Subway, the struggling family-owned sandwich chain, has hired consultant Bain & Company to professionalize operations and possibly set itself up for a future sale, the NY Post has learned. The 52-year-old chain, the largest in the U.S. by the number of locations, had previously resisted bringing in outside professionals for anything other than advertising, according to two Subway insiders. Perhaps because of that insular culture, Subway has posted declining same-store sales for more than five years.”

“Customer traffic plummeted a whopping 25 percent from 2012-17, according to a Nov. 30 internal Subway memo. To turn things around, Subway has been promoting a $4.99 foot-long sandwich, something it had done often in the past — but that has irked many franchisees because it is hard to make money on such a promotion. Plus, it does not seem to be working, sources said.”

See click the image to read more.

Photo from Shutterstock


This entry was posted in Global Retailing, Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 3: Targeting Customers and Gathering Information, Part 4: Store Location Planning, Part 5: Managing a Retail Business, Part 6: Merchandise Management and Pricing, Part 7: Communicating with the Customer and tagged , , , . Bookmark the permalink.

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