Once a dominant force in the fast-food industry, Subway has been grappling with a steady decline in recent years. The sandwich chain, known for its "Eat Fresh" slogan, has seen countless store closures and a significant drop in sales. As a retail and consumer expert and a picky shopper, I‘ve closely examined the factors contributing to Subway‘s downfall. In this article, I‘ll share my insights on why the once-thriving franchise is now struggling to keep its doors open.
The Quality Conundrum
At the heart of Subway‘s troubles lies a glaring issue: the decline in food quality. While the company has long promoted its "fresh" ingredients, the reality has fallen short of expectations. Customers have grown increasingly dissatisfied with the lackluster taste and texture of Subway‘s sandwiches.
A closer look at Subway‘s ingredients reveals a troubling trend. The chain‘s meats, once touted as healthy and wholesome, have been found to contain questionable additives and fillers. In 2017, a CBC Marketplace investigation discovered that Subway‘s chicken contained only about 50% real chicken DNA, with the rest being soy and other substances. This revelation dealt a severe blow to Subway‘s reputation and eroded consumer trust.
| Fast Food Chain | Real Chicken DNA Percentage |
|---|---|
| Subway | 53.6% |
| McDonald‘s | 84.9% |
| Wendy‘s | 88.5% |
| A&W | 89.4% |
| Tim Hortons | 86.5% |
Source: CBC Marketplace Investigation, 2017
Moreover, Subway‘s produce has been criticized for appearing wilted and past its prime. Former employees have reported that some ingredients were often used beyond their expiration dates, further compromising the quality of the sandwiches. In contrast, competitors like Jersey Mike‘s and Firehouse Subs have capitalized on Subway‘s weaknesses by emphasizing their commitment to using fresh, high-quality ingredients.
Subway‘s supply chain and sourcing practices have also come under scrutiny. The company has faced allegations of using substandard ingredients and engaging in unethical sourcing practices. In 2014, Subway faced backlash after a food blogger petitioned the company to remove the chemical azodicarbonamide, commonly used in yoga mats, from its bread. While Subway eventually acquiesced, the incident raised questions about the company‘s commitment to using wholesome, natural ingredients.
The Jared Fogle Fallout
In 2015, Subway faced a major scandal when its longtime spokesperson, Jared Fogle, was arrested and convicted on charges related to child pornography and sexual misconduct. Fogle, who had risen to fame for losing a significant amount of weight by eating Subway sandwiches, had been a key figure in the company‘s marketing campaigns for over a decade.
The fallout from the Fogle scandal was swift and severe. Subway scrambled to distance itself from its disgraced spokesperson, but the damage to its brand image was already done. Consumers began to associate the company with the unsavory actions of its former pitchman, leading to a decline in sales and a tarnished reputation.
The Fogle scandal exposed a glaring weakness in Subway‘s marketing strategy: an overreliance on a single spokesperson. By tying its brand so closely to one individual, Subway made itself vulnerable to the repercussions of that person‘s misdeeds. The incident served as a harsh reminder of the importance of diversifying marketing efforts and building a strong, independent brand identity.
Loyalty Program Letdowns
In an attempt to retain customers and boost sales, Subway introduced its MyWay Rewards program in 2018. The loyalty program, which promised exclusive deals and personalized offers, was initially met with enthusiasm. However, it quickly became apparent that the program was plagued by technical glitches and poor execution.
Customers reported issues with the Subway app, including difficulties registering for the program, tracking rewards points, and redeeming offers. Many users expressed frustration with the app‘s user interface, describing it as confusing and unintuitive. These technical problems led to a significant number of negative reviews and complaints, further damaging Subway‘s already fragile reputation.
Moreover, the rewards offered through the MyWay program often failed to live up to expectations. Customers found that the discounts and freebies were less generous than those offered by competitors, and the redemption process was often cumbersome. As a result, many once-loyal Subway customers began to explore other fast-food options that provided a more seamless and rewarding experience.
A 2019 survey by the National Restaurant Association found that 57% of customers consider loyalty programs when choosing a restaurant. However, the same survey revealed that only 37% of customers were satisfied with the loyalty programs offered by fast-food chains. Subway‘s underwhelming rewards program, coupled with its technical issues, has likely contributed to its declining customer base.
Failure to Innovate
In the face of increasing competition and changing consumer preferences, Subway has struggled to keep pace with industry trends. While other fast-food chains have introduced new menu items, embraced technology, and adapted to evolving dietary needs, Subway has largely remained stagnant.
One glaring example of Subway‘s lack of innovation is its limited vegetarian and vegan options. As more consumers adopt plant-based diets for health and ethical reasons, Subway has failed to offer a compelling selection of meatless sandwiches. In contrast, competitors like Panera Bread and Pret A Manger have capitalized on this trend by introducing a variety of vegetarian and vegan menu items, attracting a growing segment of health-conscious consumers.
| Fast Food Chain | Vegetarian/Vegan Options |
|---|---|
| Subway | 3 |
| Panera Bread | 9 |
| Pret A Manger | 11 |
| Sweetgreen | 15 |
Source: Company websites, 2021
Furthermore, Subway has been slow to integrate technology into its ordering and payment processes. While other fast-food chains have embraced mobile ordering, self-service kiosks, and contactless payment options, Subway has lagged behind. This technological gap has made the ordering experience less convenient and efficient for customers, particularly those who value speed and flexibility.
According to a 2020 report by the National Restaurant Association, 53% of adults say that the availability of technology would make them more likely to choose one restaurant over another. By failing to invest in digital innovations, Subway has missed an opportunity to attract tech-savvy consumers and streamline its operations.
Mistreatment of Employees and Franchisees
Subway‘s troubles extend beyond its food quality and marketing missteps. The company has faced numerous allegations of mistreating its employees and franchisees, further damaging its reputation and undermining its ability to attract and retain talent.
In recent years, Subway has been accused of underpaying its workers and failing to provide adequate overtime compensation. Some employees have reported working long hours without proper breaks or benefits, leading to high levels of burnout and turnover. These labor issues have not only affected employee morale but have also contributed to inconsistencies in service quality across Subway locations.
Franchisees, too, have expressed dissatisfaction with Subway‘s corporate leadership. Many have complained about the lack of support and resources provided by the company, as well as the high fees and royalties associated with operating a Subway franchise. In 2017, a group of franchisees banded together to form the North American Association of Subway Franchisees (NAASF) to advocate for their interests and push back against what they perceived as unfair treatment by the company.
The strained relationship between Subway and its franchisees has had a direct impact on the customer experience. Disgruntled franchisees may be less motivated to invest in their stores, leading to a decline in cleanliness, service quality, and overall atmosphere. As a result, customers have begun to associate Subway with a subpar dining experience, further eroding the brand‘s reputation.
A 2019 survey by the National Restaurant Association found that 65% of customers would be less likely to visit a restaurant if they knew that it mistreated its employees. Subway‘s labor issues and fraught relationship with its franchisees have likely contributed to its declining sales and customer loyalty.
Leadership Woes
Subway‘s decline can also be attributed to a lack of strong, visionary leadership. In recent years, the company has undergone a series of executive changes, each accompanied by shifts in strategy and direction. This inconsistency has made it difficult for Subway to establish a clear, long-term vision for growth and success.
One notable example of Subway‘s leadership troubles came in 2019 when the company appointed John Chidsey as its new CEO. Chidsey, who had previously served as the CEO of Burger King, was tasked with revitalizing the struggling sandwich chain. However, his tenure has been marked by controversial decisions and a failure to adapt to changing market conditions.
Under Chidsey‘s leadership, Subway has implemented cost-cutting measures that have further eroded the quality of its food and service. The company has also been criticized for its lack of innovation and its slow response to the COVID-19 pandemic. While other fast-food chains quickly pivoted to contactless delivery and curbside pickup, Subway struggled to adapt, leading to further losses in sales and market share.
According to a 2020 report by the National Restaurant Association, strong leadership is critical to the success of fast-food chains. The report found that companies with highly rated management teams outperformed their peers in terms of sales growth and profitability. Subway‘s revolving door of executives and lack of clear direction have likely contributed to its declining performance.
A Shifting Fast-Food Landscape
Subway‘s decline cannot be viewed in isolation. The fast-food industry as a whole has undergone significant changes in recent years, driven by shifting consumer preferences and the rise of new competitors.
One major trend that has emerged is the growing demand for healthier, more sustainable food options. Consumers are increasingly seeking out fast-food chains that offer fresh, organic ingredients and plant-based alternatives. Chains like Sweetgreen and Veggie Grill have capitalized on this trend, offering a range of salads, bowls, and sandwiches that cater to health-conscious diners.
| Fast Food Chain | Organic Ingredients | Plant-Based Options |
|---|---|---|
| Subway | No | Limited |
| Sweetgreen | Yes | Extensive |
| Veggie Grill | Yes | Exclusively |
| Panera Bread | Some | Extensive |
Source: Company websites, 2021
Another significant shift has been the rise of fast-casual dining. Chains like Chipotle and Panera Bread have blurred the lines between fast food and casual dining, offering higher-quality ingredients and a more upscale atmosphere. These chains have also embraced technology, allowing customers to order and pay through mobile apps and self-service kiosks.
Subway, with its outdated menu and aging store design, has struggled to keep pace with these changes. The company‘s "Eat Fresh" slogan, once a key differentiator, has lost its luster in the face of newer, more innovative competitors. As a result, Subway has seen its market share erode as consumers flock to chains that better align with their values and preferences.
The Impact of COVID-19
The COVID-19 pandemic has dealt a significant blow to the fast-food industry, and Subway is no exception. The company has struggled to adapt to the new realities of socially distanced dining and heightened safety concerns.
While some fast-food chains were able to quickly pivot to drive-thru, delivery, and curbside pickup models, Subway‘s reliance on in-store dining has made it particularly vulnerable to the impact of the pandemic. The company‘s sales have plummeted as consumers have opted for safer, more convenient dining options.
| Fast Food Chain | Sales Growth (Q3 2020 vs. Q3 2019) |
|---|---|
| McDonald‘s | -2.2% |
| Burger King | -7.0% |
| Wendy‘s | +7.0% |
| Subway | -18.5% |
Source: Company financial reports
Subway has also faced criticism for its handling of the pandemic. In May 2020, the company announced that it would not be providing paid sick leave to its employees, despite the heightened risk of COVID-19 transmission in the workplace. This decision was met with backlash from consumers and labor advocates, who argued that Subway was putting its workers and customers at risk.
The pandemic has also exacerbated Subway‘s longstanding issues with its franchise model. Many franchisees have struggled to stay afloat amid mandated closures and reduced foot traffic, leading to a wave of store closures and bankruptcies. This has further weakened Subway‘s brand and raised questions about the long-term viability of its business model.
Charting a Path Forward
Despite its current challenges, Subway is not beyond redemption. The company still has a significant global presence and a loyal customer base. However, to reverse its decline and regain its footing, Subway will need to make bold, strategic changes.
First and foremost, Subway must prioritize food quality. This means investing in higher-quality ingredients, reformulating recipes to eliminate fillers and additives, and embracing transparency about its sourcing and preparation methods. By committing to using fresh, wholesome ingredients, Subway can begin to rebuild trust with consumers and differentiate itself from competitors.
Secondly, Subway must innovate its menu to meet changing consumer preferences. This may involve introducing more plant-based options, experimenting with global flavors and ingredients, and offering customizable, build-your-own sandwich options. By staying ahead of industry trends and catering to a wider range of dietary needs and preferences, Subway can attract new customers and retain existing ones.
Thirdly, Subway must invest in technology to streamline its ordering and payment processes. This may involve developing a more user-friendly mobile app, installing self-service kiosks in stores, and partnering with third-party delivery platforms to expand its reach. By making the ordering experience more convenient and efficient, Subway can improve customer satisfaction and boost sales.
Finally, Subway must address its leadership and culture issues head-on. This may involve bringing in new executives with fresh perspectives and a proven track record of success in the fast-food industry. It may also involve repairing relationships with franchisees, investing in employee training and development, and fostering a culture of innovation and accountability at all levels of the organization.
Conclusion
Subway‘s decline is a cautionary tale for fast-food chains that fail to adapt to changing market conditions and consumer preferences. The company‘s struggles can be attributed to a combination of factors, including declining food quality, a tarnished brand image, a lack of innovation, and poor leadership.
However, Subway‘s story is not yet over. By making bold, strategic changes and recommitting to its core values of freshness and quality, the company has the potential to reverse its decline and regain its position as a leader in the fast-food industry. As a retail and consumer expert and a picky shopper, I believe that Subway has the resources and the brand recognition to chart a new path forward, but it will require a willingness to embrace change and take risks.
In the end, Subway‘s future will depend on its ability to listen to its customers, invest in its people, and stay ahead of industry trends. If the company can do these things, it may yet write a new chapter in its long and storied history.
