Financing

Subway says it continues to generate sales growth

The sandwich giant, which is looking for a buyer, said its same-store sales increased 9.3% in North America in the first half of 2023.
subway sales
Subway says its same-store sales have increased 10 straight quarters. | Photo courtesy of Subway.

Subway’s sales continue to grow coming out of the pandemic. The Miami-based sandwich giant on Tuesday said its same-store sales have increased for 10 straight quarters, thanks in part to a big boost in digital sales.

Same-store sales in North America are up 9.3% in the first half of the year, the company said. That’s down from an 11.7% increase in the first quarter—suggesting same-store sales rose 6.9% during the spring.

Nevertheless, the company said it has generated positive traffic across North America. Globally, same-store sales are up 9.8% in the first half of the year.

Digital sales increased 17.8% in North America and 11.1% globally.

The sales results are “setting the tone for another exceptional year for Subway and our franchisees,” CEO John Chidsey said in a statement.

(For more about Subway, check out this in-depth timeline of the past eight years.)

Subway needs to show sales momentum because the company is on the market and any buyer is going to want to see improving sales. This is particularly true for a chain like this one, which has shed some 6,000 restaurants over the past eight years.

Improving sales are important to drive average unit volumes, which can steady profits and slow closures. The company has been reporting its sales regularly for the past two years.

To be sure, same-store sales do get a boost at least in part because closed locations typically have lower overall unit volumes and weaker overall performance. Still, the company has generated some of its best overall average unit volumes in about a decade of late.

Subway operates fewer than 21,000 locations in the U.S. and 37,000 globally.

The company has taken numerous steps to improve its business in recent years, including a series of menu changes including improved ingredients, a line of new subs and, more recently, slicers inside its restaurants. It has improved its marketing, started working to lure multi-unit franchisees and overhauled its international franchising strategy.

Yet Subway still has low average unit volumes. A typical location generates $470,000 in sales per year in the U.S., according to Restaurant Business sister company Technomic. And profitability overall remains relatively low, which may be keeping some potential buyers from pulling the trigger.

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