Subway says its latest menu change has boosted sales. / Photo courtesy of Subway.
Subway’s second straight menu overhaul is apparently paying more dividends.
The sandwich giant on Wednesday said that its same-store sales rose 8.4% in the third quarter, including a nearly 11% increase in the month of September, when compared with the same period in 2021. The company cited strong performance from its “Subway Series,” a selection of a dozen new sandwiches that establish a new core menu for the company.
The sales represent a big win for the chain and come one year after its “Eat Fresh Refresh” helped it generate its strongest average unit volumes in eight years. On Wednesday, the Milford, Conn.-based company said its average unit volumes “consistently” exceeded weekly records established in 2012, when its $5 Footlong promotion fueled strong sales from hungry, value-focused consumers.
“The results from the Subway Series launch and the positive reaction from guests and franchisees demonstrates that our transformation strategy is working,” Trevor Haynes, president of Subway North America, said in a statement.
Same-store sales during the eight-week launch of the Subway Series rose 7.4%, the company said, when compared with the eight-week launch of 2021’s refresh.
But Subway’s numbers also highlight the continuing challenge for a certain percentage of its locations.
While Subway’s same-store sales rose 7.4% after the launch of the Subway Series, they rose “more than 12%” for the top 15,000 restaurants, or 75% of the chain’s more than 20,000 locations.
That suggests that the bottom quartile continues to struggle, with same-store sales for those locations down 6.4%. Many of those locations are believed to be at locations such as Walmarts, on college campuses or in office parks and urban areas that continue to struggle with post-pandemic traffic challenges.
Office parks and downtown areas have been a particular problem for a number of chains as many people continue to work from home and overall commuting patterns have shifted.
Still, the overall growth represents a second straight year of sales growth for a group of restaurants that have long needed the additional sales.
Subway’s average unit volume peaked in 2012 at $481,000. But its shift away from discounts and consumers’ shift toward other options resulted in several straight years of sales losses; unit volumes declined to a pre-pandemic low of $410,000 in 2017. Unit count fell along with it, from a peak of 27,000 U.S. restaurants in 2015 to just over 21,000 last year.
The company has sought to fix this problem the past two years by upgrading its menu. Its initial refresh last year featured an upgraded procedure for breadmaking along with several improvements to ingredients. This year’s “Subway Series” sought to de-emphasize its reliance on customized sandwiches for its sales, which has often slowed ordering and gave customers the ability to order items that diminish quality.
Customers order their sandwich by name or number. Donna Curry, a multi-unit franchisee, said in a statement that its customers like the flexibility of the new ordering strategy, which has increased sales and traffic to its restaurants.
Last year’s refresh appeared to work. Average unit volumes were $434,000, the highest since 2014.
Subway in the coming months expects to make other changes, notably adding slicers to its restaurants to cut down on food costs while improving its perception of quality. That addition is expected to be in place by next summer.
The company has also found success in other ways, too, notably with a new “Footlong Pass” that sold out within hours. It is also introducing a new line of soups.
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