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.
Most people don’t order property and forget the oregano, oil and vinegar.
Notice how the meat is folded so nicely in the above .Gif? EVERY time I’ve gone to Subway, the meat is slapped on flat. It does not make for a satisfying sandwich.
JJ’s have a different model. You don’t have the same number of choices, but they make it fast and with higher quality food. That limits their inventory and training.
That and a JJ will have six people at peak times where a Subway may have 3.
You're right lodi.
Same for me.
ML/NJ
In Michigan we have Tubby’s. Much better.
And now we have Jersey Mike’s. Great cheesesteak sandwiches.
I have to say, I’ve tried the much-hyped Firehouse Subs twice and found them not really any better than Subway. Might just be me, though.
I like to tell my local Firehouse Subs manager while I wait for my utterly delicious Hook & Ladder sub, 'If I were at Jimmy John's, I would already not be enjoying my sub.'
He loves hearing that almost as much as I love saying it.
Since this was tantamount to treason, I never went back. Their food was pretty bad anyway.
Subway is garbage. Their meats are awful. Their bread is half-assed. Their staff is often ill-tempered.
I’d rather go to Publix and get one of their amazing subs.
Exactly. I’m so grossed out by how it stinks up the local Wal-Mart I don’t want to go near one.
Ate at Subway once. My children make better food. I don’t eat processed foods or grains.
I don’t eat at Subway...but seems to me all their marketing efforts involves discounting/couponing...which is not a good thing.
I’m sure Jared didn’t help. Also, the few times I go into one, I find that the employees are very un-motivated...slow...complain to each other about fellow employees in front of customers, etc. I really can’t remember the last time I went into a Subway, and didn’t hear employees complaining among themselves. Kind of ruins the experience.
Whole bunch of Subways in Paris - a real curiosity to me.
I would hardly call closing stores evidence of their being in trouble. If you have over built your business, it’s survival to trim it to fit your circumstances.
The only thing Subway offers which they don't is indoor seating.
And, yeah, they also sell gas and provide clean johnny flushers.
In the land of drippy roast beef po boys Skimpy Subway is a joke. Why dont we demand food look like the ads?
I wonder if pizza quality varies between different Casey’s stores. We picked up pizzas there for the first time and even my teenage boys didn’t eat a lot-they normally eat huge amounts of food. All the kids said it was too greasy, pizzas were sitting in a pool of oil.
If you don't particularly like meat, love vegetables and adore flavorless bread, Subway's da bomb!
Otherwise known as "Footlongs in Folsom"?
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