I’ve been saying so for ages. Now, there’s confirmation. Subway has at least two huge problems and it’s not moving to fix either of them. And those problems are pissing off both franchisees and customers big time. Can the traditional Subway ivory tower approach to management survive the Great Fast Food Shakeout?
Subway several years ago began slicing its Meat and Cheese so thin you could read through it. But they insisted that you still got the same number of slices on a given sandwich as you always had. Crap. That’s a ‘Donald Trump’ explanation for Subway’s cheapness! I said, back then, that 99.44 percent of Subway customers were too smart to be taken in by that dodge.
I also said that Subway had better start listening to its customers and franchisees, and shed it’s greedy ways, if it hoped to survive the coming Fast Food Sector Shakeout. In 2015, I predicted the Shakeout would start in the early 2020s. But I amended that prediction in later posts to start even earlier. Now, I believe the Shakeout has already started, what with the acquisition of Buffalo Wild Wings by Arby’s, and the industry-wide stall on introducing any really new or exciting menu items. And lets not forget the rebellion by Canadian Tim Horton’s franchisees against the incredible cheapness and unsympathetic management of their head office, Restaurant Brands International.
The 1,000 Subway stores that closed in North America this year represent only about 3 percent of the 26,744 outlets it started with this time last year. But it’s evidence that Subway is still suffering under multiple challenges. Market analysts insist that the chain remains tainted by former spokesfatty Jared Fogel’s child molestation scandal, not to mention the CBC investigative report, based on DNA evidence, that Subway Chicken Strips were only about 50 percent Poultry.
In desperation (?) Subway has announced the return of its popular $5 Footlong this coming year. But franchisees say their profits margins are already squeezed tight enough and claim that the $5 deal will sink them.
The bottom line: Subway sales have dropped 25 per cent over since 2012. And the latest industry polls show Subway has the least-loyal customers of all Fast Food chains.
The Shakeout is upon us…
Recently, I posted a revised set of predictions about the coming Shakeout. I noted that the Chili’s TexMex chain has slashed its menu by 40 per cent in an attempt to refocus on its core business, and what it does best. It’s menu and it’s brand identity had become hopelessly muddled in with the competition’s in recent years.
Not only that. But the Burger, Coffee and Ice Cream sectors are also heavily invested in menu items and brand image marketing that is not connected directly to their core businesses. For instance, you can’t maintain a strong image as a leader in the Burger business if you spend more than half your advertising time and money on promoting. Coffee, Chicken and fancy Desserts. All the payers quickly begin to look and sound the same.
So… Look for mergers within the Burger sector. Arby’s acquisition of Buffalo Wild Wings won’t be the last such move in the ‘Meat Sandwich’ sector…
Perhaps Subway will be an early casualty of the Shakeout, unless management – mysterious secretive, private Doctor’s Partners group – take their heads out of the sand.
~ Maggie J.