New York (CNN Business) – After years of falling sales, Subway wants to re-introduce itself to customers and convince them to give their sandwiches a try.
Next week, Subway restaurants across the United States will introduce an updated menu designed to enhance items across the board. The chain says the move is the biggest menu change in its history.
The revamp includes new recipes for the chain’s Italian and multigrain breads, as well as new sandwich toppings.
The chain is also modifying items that are already on the menu. Subway’s bacon, for example, will now be smoked with walnut and the turkey and ham, cut into thinner slices. It will also bring back items from the past like rotisserie chicken and roast beef. To encourage customers to try the new ingredients, thousands of restaurants plan to give away up to a million free sandwiches between 10 a.m. and 12 p.m. on July 13. The chain will also revamp the look of its app and partner with DoorDash to allow customers to order delivery directly from the Subway app.
Subway was once considered by some buyers to be an affordable and relatively healthy option; they could load up their sandwiches with their preferred combination of vegetables and protein without spending a lot of money. But in recent years, competition in the casual fast-food space has helped Subway outpace.
“We want to cause an explosion strong enough … to attract those people and give us another look,” Subway CEO John Chidsey told CNN Business.
With the new menu, Subway woos those customers while hoping to please its franchise operators.
Bring customers back
According to foodservice research and consulting firm Technomic, sales at Subway’s U.S. locations have been falling in recent years. System-wide sales at Subway’s U.S. locations were $ 12.3 billion in 2013, which was its best year in the past 15, and about $ 8.3 billion in 2020, according to Technomic analysis. .
In response to a request for comment on those figures, Trevor Haynes, Subway president for North America, said in an emailed statement that “Subway is a private company and does not publicly disclose sales figures.” He added that “for the first half of 2021, on average, sales are doing well compared to the pre-pandemic levels of 2019.”
When Subway first rose to prominence, it “mastered” personalization, said Robert Byrne, director of consumer and industry insight at Technomic. But the rise of the fast-food casual style made customization the norm. Now, customers can build their own burritos, salads, sandwiches or bowls, making the competition fierce. As more restaurants offer personalized options, “we want to continue … to dominate that space,” Chidsey said.
Research by Subway showed that customers wanted more innovation, Chidsey noted.
With that in mind, the company decided to “focus on raising the quality of the basic ingredients, because with those basic ingredients you can make almost an infinite number of sandwich combinations,” Chidsey said.
It’s not just about customization. “Perceptions of health and what is healthy [han] evolved, “Byrne said.” From an ingredient standpoint, I know consumers would love to know a little more about sourcing. “
Recently, questions have been raised about Subway’s tuna – a lawsuit alleges that Subway’s tuna sandwich is not actually made from that fish. Since then, the lawsuit has been amended to allege that the tuna Subway uses is not made 100% with tuna and does not always use skipjack or yellowfin tuna. Subway called the original lawsuit “unfounded” and said “the new claims are false,” adding that “the lawsuit constitutes a reckless and inappropriate attack on the Subway brand.”
Subway continues to proudly serve the product and says “100% wild tuna remains a fan favorite.”
Tension in franchises
The update also has the potential benefit of pleasing franchise operators, some of whom have been clamoring for changes.
One metric of the upgrade’s success is a “revitalized franchise community,” Chidsey said. “It is important to us internally.” Franchisees have also been asking for more menu innovation, he said.
Some Subway franchise operators have publicly complained about the company’s treatment of them. In April, an anonymous group of “concerned franchisees” wrote an open letter to Elisabeth DeLuca, the chain’s co-owner. Subway’s dream “has turned into a nightmare,” they said, writing that Subway damaged their business by franchising new locations nearby or closing stores for minor infractions, among other things. In a separate letter, they complained about high franchise fees. Subway’s franchise rates are “competitive,” said Trevor Haynes, Subway’s president for North America, in an emailed statement.
“There are still some people who are unhappy with the past,” Chidsey said, referring to the franchisee’s complaints. “But I think if you talk to the vast majority of our franchisees, they will say that we have had an incredible six-month streak,” he said, suggesting that the higher sales are encouraging for franchise operators. “Things are improving dramatically.” He added that the chain is focused on increasing sales rather than the number of Subway restaurants in the United States.
Aligning franchise operators with the corporate team is essential for the company to change, said Byrne of Technomic. “I don’t think they can do anything until those two groups are on the same page.”