Subway Not Exactly On A Roll, Plans To Close 500 Stores
Subway, the most omnipresent of restaurant chains, has fallen on tough times. Bloomberg reports the struggling sandwich brand plans to shutter 500 stores in the U.S. this year in favor of international locations; last year, the corporation closed 800 stores.
The sheer number of Subway stores in the U.S. is staggering. Even after last year's closures, the number stood at 25,908. I remember a road trip through a remote part of northern Idaho where I was hardly getting a radio station on the dial and seemed not to pass another car for miles. But then I'd roll into a sleepy little town and boom, Subway.
The glut of Subways may be part of the problem, according to CEO Suzanne Greco, who told Bloomberg: "We focused in the past on restaurant count. We're focused now on strengthening market share."
The chain's been dealt a series of blows in the past few years. There was the whole spokesperson Jared Fogle going to jail scandal, as well as broader market forces that are squeezing the sandwich maker's profits. Greco says McDonald's increased sales have been a factor, as has an increase in grab-and-go sandwiches at convenience stores and gas stations. And the chain's biggest promotion, the $5 footlong? Franchisees hate it. Last year, they banded together in revolt against the corporate-mandated deal, which they say decimates their profits. In the leaked memo that revealed such internal dissent, Subway said customer traffic had fallen 25 percent in the past five years.
Ready for my scalding-hot analysis? Maybe Subway sandwiches just aren't so appealing anymore. I ate one last month on yet another road trip and it was... fine. I probably could have found something just as mediocre in a gas station. Subway's health claims—that "Eat Fresh" tagline used to set it apart from fast-food burger chains—are less relevant now as most mainstream fast-food spots offer salads or lower-calorie alternatives to double cheeseburgers.
As a result, the vision of a Subway on every corner is falling by the wayside. You may soon have to travel a whole two towns over to get your footlong fix.