Subway is planning to introduce a menu of items priced at $5 or less next month, including a trio of Footlong subs, as it works to recover from years of declining traffic.
Sources have confirmed the new value offer to Restaurant Business.
The value menu, similar to strategies deployed at other fast-food restaurants in recent years, is designed to give consumers more price certainty when they visit one of the Milford, Conn.-based sandwich giant’s restaurants.
The menu will include three Footlong subs, 6-inch sandwiches and its low-priced Sliders, among other items.
Subway declined to comment for this story.
The value menu is part of a massive set of changes at the world’s largest restaurant chain by unit count that executives hope will help spur a turnaround following several years of sales declines and store closures.
Those changes follow a major executive overhaul, including the hiring of John Chidsey to be CEO, along with 300 layoffs at the company’s headquarters. Executives are expected to present many of their planned changes to franchisees at an upcoming conference in Orlando, Fla.
One of Subway’s biggest new strategies was highlighted this month when the chain started offering buy one, get one free Footlong subs to customers who ordered via the company’s smartphone app or website.
Subway wants to increase its digital orders, which lag badly behind many of its competitors. The targeted offer is designed to boost those sales, and Subway backed the effort with a popular ad featuring the NFL’s Watt brothers: J.J., T.J. and Derek.
But franchisees’ response to that offer also demonstrated one of the challenges the brand faces as it works to regain sales and traffic. Operators have been pushing back against value offers in recent years amid their own financial concerns. That included a near revolt in late 2017 over a $4.99 Footlong offer.
Franchisees, facing rising labor and food costs along with consistent declines in traffic and same-store sales, have shuttered 13% of the chain’s U.S. units since 2015. That includes more than 1,000 restaurants in both 2018 and 2019.
“Franchisees get upset because they continue to believe the front office and developers don’t care about penny profit or line speed, or about what’s happened to Subway over a period of time,” said John Gordon, a restaurant consultant out of San Diego.
Subway has lost significant traffic since 2013, a period that coincides with its shift away from the popular $5 Footlong promotion that carried the brand through the recession.
Regaining that lost value customer with a predictable value offer could help bring customers back.
“I can see why they need it,” Gordon said. He noted that the company has had too many differing discounts in recent years, which has confused customers. “They could consolidate their discounting under this new $5 banner and put their marketing weight behind it.”
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.