In response to a recent slump in sales, Subway is overhauling its marketing strategy, shifting focus from promoting snacks to emphasizing value meals, sources revealed following a conference call with franchisees.
Subway CEO John Chidsey announced on Thursday that starting August 26, the chain will introduce a daily $6.99 foot-long sub promotion exclusively for online orders. This new initiative, which will run for an initial two weeks, could offer discounts exceeding 50% on select days. For instance, the Titan Turkey sub, which normally costs $11.89, and The Beast, priced at $13.99 in some New York City locations, will be significantly discounted under this promotion.
Unlike previous promotions that required customers to buy two sandwiches to receive a discount, the new offer will not impose such conditions. Chidsey acknowledged that an earlier $7.99 foot-long promotion in Los Angeles failed to drive sufficient traffic, prompting the decision to lower the price by another dollar.
Apart from daily sub deals, Subway is also planning to roll out a “triple play” offer, featuring a four-inch sandwich, soup, chips, and two cookies for $6.
Subway has been grappling with a decline in same-store sales of over 8% in certain regions compared to the previous year, a stark contrast to more stable performances from competitors like McDonald’s and Burger King. Recent reports indicated that while McDonald’s has extended its $5 value meal promotion into October, Subway’s efforts to boost traffic with snack promotions, such as its $3 Dippers, have not resonated with customers.
A Subway franchisee criticized the Dippers initiative as a failure, and Chidsey emphasized the importance of focusing on core menu items moving forward. He acknowledged the current challenges, describing the downturn as a cyclical issue in the quick-service restaurant industry that typically occurs every eight to ten years, and stressed the need for Subway to plan for future growth.
Despite these efforts, franchisees have expressed concerns about the profitability of the new promotions, with Chidsey reportedly not addressing these questions during the call. As Subway operates solely through franchised locations, many franchisees are struggling to achieve profitability amid the broader industry challenges.
