Subway Brand Closes More Stores than Opened in 2016

In 2016, Subway closed more stores than it opened. It now has 26,744 stores in America which means it is still the most ubiquitous restaurant chain in the U.S. It closed 359 U.S. locations last year.

The company, in an e-mailed statement, said, “We will continue to relocate some shops to better locations and look for new sites- both traditional and non-traditional.”
Subway’s U.S. home market is no longer a key market for Subway’s future expansion.

Sales in 2016 dropped by 1.7% to $11.3 billion, down from $11.5 billion in 2015.

According to MillerPulse data, industry-wide, same-store sales has dropped 0.6% for the fourth straight month of decreases. U.S. restaurants are also affected as lower grocery prices have led to people choosing to cook at home. Also, minimum wage increases have pushed restaurants to increase menu prices.

To revive its reputation as a place to get healthy food, it is eliminating antibiotics from its chickens and is switching to cage-free eggs. Also, the company is now providing deliveries. It also revamped its logo into a more contemporary look.

Globally, it still has more than 40,000 shops, the most than any fast food chain. Sales outside America increased by 3.7% to $5.8 billion as it continues to expand operations.

The company, in a statement, said, “Sales for 2016 reflect our focus on international growth. We are undertaking an exciting transformation that includes introducing new and improved products, creating an even greater customer experience, refining operations, and positioning Subway franchisees for continued success.”

It recently innovated by allowing usage of Facebook Messenger ordering through Masterpass-enabled bots. 

Recently, Subways hired former McDonald’s executive Karlin Linhardt to head its marketing division for their U.S. and Canada stores which are over 30,000. He was previously a senior consultant for Accenture. He also spent a decade with McDonald’s and another decade with Anheuser-Busch. He also was on the board of directors for Perkins & Marie Callender’s Restaurants.

Subway CMO Joe Tripodi, said, “Karlin will be a critical member of our leadership team as we strengthen our brand and grow in a way that best supports our North American franchisees. Karlin strategically and operationally understands our business and the challenges our franchisees face every day. He will be an impact player as we transform Subway at every consumer touchpoint in North America.”

In 2016, the company hired Katie Coleman to lead global public relations. Subway was involved in a scandal wherein their former spokesman Jared Fogle was sent to prison for child pornography charges.

Competition from fast-casual competitors like Sweetgreen and Panera has made it difficult for Subways. The market has gotten quite crowded with companies like Little Caesars, Chipotle and niche players Arby’s.

Even McDonald reported a drop in same-store sales in the 4th quarter of 2016. This was despite to have many stores operate 24/7.

Subway was founded 52 years ago by Fred DeLuca and Peter Buck. When DeLuca died in 2015, his younger sister Suzanne Greco took over and became chief executive officer. The company does not have company-owned restaurants. Franchisees own all.

Subway is privately owned by Doctor’s Associates Inc.