Subway will be introducing a plethora of menu items for $5 or less, and it will include three Footlong subs. The move is to help the company recover from years of dismal sales.
This value menu strategy is one other fast-food restaurants have implemented to help boost their bottom lines. The key is to provide consumers with some price certainty when visiting one of Subway’s restaurants.
According to the Milford, Conn.-based sandwich chain, the menu will offer three Footlong subs, Sliders, six-inch subs and various other items. The value menu comes as part of a slew of changes Subway executives hope will reverse the slide in sales and store closures over the last few years.
The changes come in succession with a massive executive overhaul, which includes the hiring of John Chidsey for the CEO position and 300 layoffs at its headquarters.
Executives will likely present the changes to franchisees at the Orlando, Fla. conference.
One of the restaurant’s most significant strategies is the offering of a buy one, get one free Footlong sub for customers who ordered through the company’s website or smartphone app. Subway is looking to boost its digital orders, which is far behind most of its competitors. With this offer, the company hopes to increase its sales. It propped the offer up with its ad that features the NFL Watt Brothers – Derek, T.J. and J.J.
Franchisees, on the other hand, are not happy with this offer, making it difficult for the brand to regain its traffic and sales. These operators, facing their own financial issues, have argued against such value offers. In 2017, the $4.99 Footlong offer nearly caused a revolt by the franchisees.
Franchisees have faced rising food and labor costs while also seeing a decline in same-store and traffic sales. This has led to the shutting down of 13 percent of stores (around 1,000).
San Diego restaurant consultant John Gordon said franchisees are unhappy because they feel the front office and developers don’t care what’s going to happen to Subway in the long run.
Since 2013, Subway has seen a tremendous loss in its traffic. This is around the same time the company turned its focus away from the $5 Footlong promotion it used to help itself (and consumers) during the 2008 recession.
If a predictable value offer were to be provided, it could help with recapturing lost value customers.
Gordon said he could see why the company needs it. He said the company has had a plethora of different discounts, which have only led to confusion among consumers. He said consolidating the discounts under the $5 value menu and putting some effort into the marketing could help bring the brand back to the people’s focus.
