One Fast Food Chain Is Being Left In The Dust
There's one brand that continues to backslide toward oblivion.
The annual Top 500 Report from Nation's Restaurant News is always such a wealth of fast food industry insight, it should come with a digital bow on top. Each year, NRN tracks the sales performance of America's biggest restaurant chains and compares them against previous years, the charting of which paints a portrait of America's shifting tastes across the decade. This year's report, looking back at 2021 data, shows that fast food had a healthy rebound over a shaky 2020, with every chain growing their sales last year and entering this year in strong position—every chain, that is, except for one.
The biggest fast food successes of 2021
First, let's touch on some of fast food's biggest wins (and there were a lot of wins). NRN reports that among the top 10 restaurant chains in America ranked by sales, nine of those 10 grew their sales in 2021 compared to the previous year, and four of them—Chipotle, Dunkin', Chick-fil-A, and Starbucks—grew by double digits. (Chipotle in particular grew by a whopping 19.3%.)
Sales numbers don't tell the whole story, of course, because sales do not equal profits. Factors such as inventory prices can influence total profit margins for the brand. Additionally, 2021 sales figures are being compared against 2020, a year wracked by unprecedented pandemic closures and seismic shifts in consumer behavior; as a result, nearly every year-over-year comparison looks rosy.
"Comparing the performance of the restaurant industry's Top 500 brands in 2021 with the previous year was quite a bit like comparing 2020 with 2019 — only in reverse," notes NRN.
McDonald's, as usual, continues to reign supreme. It's not even close. Bravo, McDonald's. Now, on to the very unlucky fast food chain that continues to flounder.
Subway is slipping lower and lower
Were you able to guess the unlucky contender? Subway slid backward in the rankings yet again this year, down to number 8 from number 7 in 2021, and number 6 in 2020. It was the only chain in the top 10 to report a net loss in sales, by 3%.
By contrast, 10 short years ago, Subway was nestled comfortably in the number 2 spot, behind (who else?) McDonald's. Despite the chain's big, splashy "Eat Fresh Refresh" campaign, Subway just can't seem to figure out what the average sandwich consumer wants in 2022. Change takes time; perhaps any gains from the Eat Fresh Refresh campaign will become more evident this time next year. Either that, or customers have heard too many stories about dubious tuna lawsuits, the chain's alleged poor treatment of its franchisees and everything else detailed by John Oliver, and simply decided to spend their money elsewhere.
With 2021 sales of $8.9 billion, it's not as though Subway is ruined by any means. Indeed, NRN points out that it still operates the most units of any fast food chain in the country (21,178 in the US alone!!) and the world (36,821!!). But we just might be witnessing the gradual obsolescence of a once mighty fast food giant. Will it go gently from the top 10 list altogether next year? What would it take to see Subway come roaring back in the rankings?