Would you believe that Subway locations outnumber McDonald’s locations in the United States by more than 10,000 outlets? That’s because of the high number of “non-traditional” Subway shops like those on college campuses, at airports, and inside convenience stores—in fact, those types of locations now make up 25% of the chain’s entire North American portfolio.
For the first three quarters of 2022, non-traditional Subway outlets saw an average 13% increase in same-store sales compared to 2021. With a renewed focus on such locations, the sandwich chain is making a big bet on technology: According to a press release, Subway has debuted its first fully automated, contactless grab-and-go smart fridge, with plans to roll out more fridges in the future.
Subway has been on a long journey over the past couple of years to regain its status as the number-two fast food joint in America, just behind McDonald’s. In 2021, with the launch of its Eat Fresh Refresh program, Subway kicked off a transformation that included tweaks to the menu, including new ingredients and an improved online ordering experience.
Unfortunately, the brand’s popularity continued to slip following this new program, and so it tried once again to freshen things up. A year after the Eat Fresh Refresh program began, Subway announced the Subway Series menu, an overhaul that offered customers a streamlined selection of 12 signature sandwiches that each aligned with one of four overall menu categories: Cheesesteaks, Italianos, Chicken, and Clubs.
Initially, it seemed like these arbitrary categories would alienate customers, who have always seemed to enjoy customizing their assembly line sandwiches. However, despite this break from tradition, Subway’s impressive third quarter sales indicate the Series menu was a necessary change: In Q3, Subway saw an increase of 8.4% in sales at stores open at least one year, reported CNN, as well as “record-setting sales” for the 18 months prior to October 2022.
Subway began testing premade “on-the-go” subs back in 2020. Franchisees would prepare and deliver sandwiches to retail locations like casinos and hospitals where they could be sold; there are now more than 400 locations offering these ready-made subs across North America.
Building upon this concept, in September Subway installed its first smart fridge at the University of California San Diego. The fridges, which are stocked daily by the nearest brick-and-mortar location, use “artificial intelligence and natural language processing” to allow customers to speak to the machine and ask about what’s inside the fridge. The high-tech vending machine also has weight-sensor shelves, which determine correct pricing, and undergoes UV-C light sanitation after every purchase. Each transaction is cashless and virtually contactless.
“Subway Grab & Go has quickly gained traction as consumers are drawn to sandwiches made fresh daily from a brand they know and love, versus competitor items that rely on a 14-day plus shelf life,” said Karla Martinez, director of innovation for non-traditional development, in the company’s press release. “As Subway continues to expand off-premises concepts, guests can expect to find Subway Grab & Go and smart fridges in more convenient everyday places like airports, college campuses, and hospitals.”
These vending machine sandwiches are the antithesis of the build-your-own sandwiches that made Subway famous. Yet if the Subway Series menu is any indication, customers don’t mind selecting from a more limited menu in the name of greater convenience—in this case, sandwiches that are theoretically available 24 hours a day.
Though Subway is calling them smart fridges, and their AI technology seems fairly advanced, it’s not yet clear that they’re breaking any new ground; we’re comfortable simply referring to these things as vending machines. What I can say with confidence is that these machines are unlikely to spit out a footlong Sweet Onion Chicken Teriyaki with provolone cheese and lots of added pickles, and if I can’t have that, then it’s not a Subway sandwich in my book.