Starbucks last year leapfrogged Subway to become the second-most prolific restaurant chain in the world.
The Seattle-based coffee shop chain added another 3,000 locations worldwide in 2023, according to data from Restaurant Business sister company Technomic. It now operates 38,587 locations, making it the second biggest restaurant chain in the world by unit count.
That is 2,000 restaurants ahead of Subway, which for a long time had been the biggest restaurant chain on the planet by unit count, but which in recent years has declined as operators in the U.S. and other parts of the world closed restaurants and other brands took off.
Subway operates 36,516 restaurants, a slight decline from 2022, according to Technomic.
Both brands are looking up at McDonald’s, which now operates 41,822 restaurants worldwide, making it the largest restaurant chain in the world based both on unit count and system sales. McDonald’s surpassed Subway by unit count in 2020.
Unit count is generally an imperfect method for measuring restaurant chains. Though Subway's sandwich shops have seemingly been everywhere for a long time, its low unit volumes mean the chain doesn’t generate anywhere near the sales of similarly sized concepts.
For instance, in 2022 the chain generated $15.6 billion in global system sales. By contrast, Starbucks generated $28.1 billion. McDonald’s generated nearly $120 billion that year.
Starbucks was able to surpass Subway largely because of its own aggressive unit growth coupled with Subway’s struggles.
The sandwich chain’s U.S. unit count has been in decline since 2015. Franchisees in the U.S. closed about 7,000 locations since then, while international locations began closing around 2018. The company has about 2,000 fewer non-U.S. units than it did in 2017, when it operated over 18,000 international restaurants, according to Technomic.
The brand expects U.S. unit count to remain steady or decline, but over the past two years, it has started to see its international growth rebound, thanks to key deals with operators in several international markets. Subway’s international unit count has grown in each of the past two years.
But it’s not enough to keep it from watching Starbucks pass it by. The coffee shop chain has continued to add units at an aggressive pace, both in the U.S. and internationally, and is now working on multiple development strategies.
The company operates traditional coffee shops, a select number of specialized “Reserve” stores, takeout-only locations and now delivery-only units, based on the state of individual markets. It also has a powerful licensing strategy that has made its shops commonplace on college campuses and in airports.
While the brand has lost its status as the largest coffee shop chain in China to local upstart Luckin Coffee, it continues to say that the market is key to its future. But it is also eyeing India as a growth market.
“We have 1,150 stores in Shanghai,” Starbucks CEO Laxman Narasimhan said in an interview last year. “We have 1,000 in Beijing. We have 375 in India. Those two countries represent 35 to 40% of humanity.”
And the brand has plenty of growth opportunity in the U.S., executives say. The company expects to generate 4% unit growth domestically this year and believes there are plenty of places still to put its coffee shops.
“Even in the U.S., we see abundant greenfield opportunity ahead,” Narasimhan said on the company’s earnings call on January.
It may only be a matter of time, in other words, that Starbucks overtakes McDonald's. At least on unit count.
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