Posted on 05/06/2016 6:31:27 AM PDT by JoeProBono
Subway Revenue Drops as It Closes Hundreds of U.S. Restaurants
Subway Restaurants revenue fell in 2015 for the second straight year, a sign one of the fast-food industry’s stalwarts is losing ground to newer chains.
Revenue dropped 4.3 percent to $1.11 billion last year, according to the company’s Franchise Disclosure Document, which was filed with the Minnesota Department of Commerce last week. Subway owner Doctor’s Associates Inc. also is slowing its pace of new restaurant openings and shuttering hundreds of underperforming locations.
Fast-casual chains such as Panera Bread Co. have been taking share from Subway restaurants in the U.S., bringing its once-torrid growth phase to a halt. Founded in 1965 by Fred DeLuca and Peter Buck, the submarine sandwich shop had expanded quickly over the decades by aggressively franchising.
It now has more than 44,000 locations worldwide. Lately, though, Subway has struggled to keep pace with more modern rivals, which cater to millennials with items such as quinoa salads and Greek yogurt.
While Subway opened 911 new locations in the United States last year, it closed 877. That means it netted just 34 restaurants in 2015, a slowdown from 313 the year before. Subway had a total of 27,129 domestically at the end of 2015, all of them franchised.
Net income declined 87 percent to $1.15 million from $9.19 million in 2014.
Last year, the company said it was putting new store development on the back burner while it focused on making its restaurants more profitable. “That hasn’t changed,” Subway said in a statement on Tuesday.
“The outlook for 2016 is more optimistic based on the terrific feedback we received from our guests about our culinary improvements and exciting new menu offerings,” the company said.
Still, Subway is feeling more pressure from traditional fast-food chains. McDonald’s is luring back customers with an all-day breakfast push and aggressive discounts, such as offering two sandwiches for $5. To fight back, Subway just started promoting a buy-one-get-one-free sandwich deal in the morning during May.
The Milford, Connecticut-based chain had a tumultuous 2015. DeLuca, the co-founder and chief executive officer, died in September, putting the company in the hands of his sister, Suzanne Greco. In November, former spokesman Jared Fogle was sentenced to more than 15 years in prison after pleading guilty to child-pornography charges, capping a scandal that had rocked the sandwich chain for months.
In December, the company named former Coca-Cola Co. veteran Joseph Tripodi as its global chief marketing officer, a sign it’s looking to revamp its image. Subway’s longtime “Eat Fresh” slogan lost cachet in an industry where most every chain now touts its ingredients.
I like Subway for breakfast. No line for coffee, unlike Starbucks, and they have egg whites or eggs, and yummy stuff to put on your egg sandwich.
I have designed a roast beef sandwich, too, that floats my boat, and doesn’t get too caloric or expensive.
Also, if you don’t want the bread, you can have your fixin’s put on a bed of lettuce and you have a nice custom salad.
Quizno’s went out of business near us. ToGos replaced it, but it’s more expensive than Subway.
Subway may retract if it was over-extended, but I think it has staying power.
Most likely. They should have dropped that creepy looking guy within a year of the ad campaign.
Jersey Mike’s for me...had to go eight years without while stuck in soviet Red Hampshire. They are all over the place here in East Tennessee. Never understood the draw of Subway’s ‘bread sandwiches’.
Yes. Our local one is very good. Nice folks, management and staff know me and my friends by name. We make a point of going there at least two or three times a month.
I love the Italian.
I prefer Subway over Panera. The only time I went to Panera, the only meat on the menu was chicken and bacon. I ordered a chicken salad, and the meat in the salad was chopped up sandwich slices and the bread was so hard it hurt my teeth to eat it. Never been back.
Me too. The second they sold out to the facists, I have not given them a dollar.
It’s funny how so many companies that go all in with the left suddenly see major financial drops. Subway, Macy’s, most likely Target. Then the left goes ape-sh__ over Chic-fil-a and they are on the ascendancy.
Jimmy Johns is kicking their butts hard! Plus, there are several other chains that have cropped up with better offers.
I don’t eat at Subway. Their food is salty and terrible, and their employees are a freak show. Unhygienic employees are not appetizing.
Lunch ladies are the best!
Nothing. Just as there is nothing special about any other fast food place. All of them are fine from time to time. Most of us have the sense to mix it up enough to not get bored.
I have personal favorites on a few items, but by and large, fast food is interchangeable. I don't get hung up on any brand; the variety is the thing. The only thing I've eaten at McDonald's in many years is the fish sandwich, and if I'm not in the mood for that, I go somewhere else. There are about three chains where I'll order the burger, a similar number for fried chicken, and a couple for subs.
It really just depends on what happens to be at a particular exit along the highway when I'm on a road trip and trying to make time, which is primarily when I eat fast food.
I like McAlisters. Especially the New Yorker, 10 ounces of Pastrami and Corned Beef with swiss cheese on rye. Yummmmm
Zero taste to the ‘cheese’...you’re right on that annie.
lol!
Yep, there's a lack of decent hoagie places down South. Subway is okay. I eat there occasionally, it's nothing flamboyant and it's boring. For a chain, I like Jerry's, prevalent in Maryland. Good cheesesteaks.
Subway is without a doubt one of the worst restaurants for service. At least in our experience.
Over the years we stopped in at different Subway restaurants around Southern California on multiple occasions to try to get a sandwich. We’d walk in, and the employees in every case were grouped together chatting, and laughing. We’d see them look over at us, and go on with their conversation. They never offered service, and we’d end up walking out of the place.
We did finally get served at one Subway in San Marino while on a day trip one time, but other than that we experienced an attitude that drove us away.
I can get the same or better quality food at my local QuickTrip (a local gas station / convenience store).
I have notice in Georgia at least a big expansion of reasonable food choices at gas station / convenience stores
The Publix Supermarket chain deli has the best subs in the world, Boar's Head meats and fresh baked, delicious bread. I get their Italian sub...it's tops.
Leni
Yep I notice an expansion of QTs and Sheetzs here in North Carolina.
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