For a long time, if you wanted to get a sandwich delivered to your door, there were few choices available to you—and the biggest, by far, was Jimmy John’s.
That’s no longer the case. In the past year alone, the Champaign, Ill.,-based chain has received some company on the sandwich delivery bandwagon: just about everybody else.
Earlier this month, for instance, Subway announced it had delivery in 9,000 of its U.S. locations. To put that into perspective, that alone is triple the number of Jimmy John’s restaurants nationwide.
And it’s not just Subway. Jersey Mike’s is quietly adding delivery at its restaurants. Firehouse Subs, meanwhile, went national with a partnership through Uber Eats in September.
And that’s not taking into account players outside of the sub sandwich subsegment. Panera Bread has quickly added delivery at its restaurants, too.
“It’s a foregone conclusion that third-party delivery services are here to stay,” Jersey Mike’s President Hoyt Jones told me on a recent "A Deeper Dive" podcast. “We think it’s going to be a nice piece of business.”
Jimmy John’s would not comment for this story.
To be sure, the delivery trend that has quickly spread throughout the restaurant industry is taking hold in many other sectors. Big burger chains are getting on board with delivery, for instance, and a number of casual-dining chains are, too. And of course, pizza players such as Domino’s, Pizza Hut and Papa John’s are also facing questions about the potential impact of so much delivery on their core businesses.
But nowhere are the market dynamics such as they are in the sandwich segment, and the delivery question is more important to Jimmy John’s than maybe any other chain. All of a sudden, it's no longer the only sandwich on the delivery block.
It represents a major test for the company, owned by Roark Capital, after nearly unstoppable growth for years.
According to Technomic data, Jimmy John’s average unit volumes declined 5.3% last year. And the company’s total traffic year to date is down 3.9%, according to Technomic Transaction Insights data.
That said, it’s hardly the only chain facing challenges in a more competitive market: Subway’s own traffic is down 7% this year. Both Jersey Mike’s (up 12.5%) and Firehouse (up 4.8%) are doing quite well.
For Jimmy John’s sandwich competitors, there are pretty simple reasons for their move into delivery.
“Our food travels well,” James Walker, vice president North America for Subway, said on our podcast. “It’s craveable. It’s high value. And it’s great when you receive it at your home or office.”
But they also have little choice in the matter. And for this we also go back to a podcast, one we recorded with Firehouse Subs CEO Don Fox.
Firehouse was designed in part as a dine-in chain. But its dine-in business over the years has declined from more than 52% to 40%, and Fox says the decline is accelerating. In short, consumers simply want more convenience.
“You have all of these other channels the consumer can exercise, and they all deliver some enhancement when it comes to convenience,” Fox said, referring to smartphone apps and drive-thru windows, as well as delivery. “None are an improvement on food quality or are a better experience from a hospitality standpoint.”
“The convenience element is what’s so critical,” he added. “And the customer is willing to pay more for that convenience.”
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.