When you read about Subway in the news, it’s rarely about anything positive. The sub shop always seems to be embroiled in some sort of tussle, whether it’s dealing with accusations that its tuna is fake, or reports that its relationships with franchisees are suffering massively. In a move that sounds slightly defeated, Subway CEO John Chidsey has announced that its future planned growth will be international, rather than stateside, reports Nation’s Restaurant News.
Subway is focusing on quality, not quantity
The plan domestically, for now, at least is to improve the quality of its product over its current population of over 20,000 storefronts in America, rather than focus on its former strategy of aggressive expansion.
“We just want to focus on quality in the footprint in the U.S. as opposed to quantity,” Chidsey said. He added, “I don’t really see a lot of growth in the U.S. other than on the nontraditional side. I don’t think we’ll close a lot more restaurants—maybe a handful around the edges—but I think the U.S. is sort of in a steady state, and all the growth will really be international.”
It could just be me, but that sounds a little bit sullen, doesn’t it? “I don’t really see a lot of growth in the U.S.” certainly sounds like a pessimistic thing to say out loud, especially about your own company. I do understand that there’s likely a ton of potential overseas, where markets are certainly growing. But my gut says that positive American perception of Subway is waning rapidly, and I honestly don’t remember the last time I’ve heard anyone say they’ve eaten there recently. I remember eating there as a kid used to be a really big treat for me, but that was over two decades ago.
Where is Subway adding new locations?
Right now Subway has its sights on South Asia, where it plans on opening 2,000 units with the help of a private investment firm, Everstone Group. That’ll triple its footprint in Sri Lanka, Bangladesh, and India. Last year there were pushes to expand in Indonesia and in the United Arab Emirates as well.
Overall international perception of Subway feels a little more positive, at least from what I’ve witnessed. For example, while I don’t watch a ton of K-dramas, one I watched recently, Crash Landing on You, had a ton of shiny Subway product placement. The shop was portrayed as really nice and semi-flashy place to go and grab a sandwich, which is a detail that even caught the eye of The New York Times, so I know I wasn’t the only one who noticed.
Chidsey said, “In the next two to four quarters, you’ll probably see another eight to 12 international deals being signed. That gives you a good idea of what we’re working on.” In the meantime, in regards to America, Chidsey continued, “I still think there’s some non-traditional opportunities in the U.S. But we want to get away from being so unit-focused in the U.S and focus more on the quality of what we have.”
What’s next for Subway?
Subway is in the middle of a campaign intended to revitalize the chain, called “Eat Fresh Refresh.” It launched last summer, and was a successful move, resulting in Subway’s best sales run in eight years. Refresh 2.0 is on the way, which will focus on proteins and new signature sandwiches. It’s the second of three planned phases of the campaign.
These are all pretty big words, but I do still have this gut feeling that this is a signal that Subway might be treading water in America. I honestly don’t recall the last time I heard a company said they weren’t actively trying to grow here, so we’ll see. If anyone is getting a brand spankin’ new Subway, apparently it’ll be everywhere else but here.