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Subway takes a victory lap

The sandwich giant says its sales are the best it’s had in years following its brand refresh and new ad campaign but the numbers show some stores are still far behind.
Subway sales growth
Subway's same-store sales rose 4% over 2019 in August and it had the best unit volumes in nine years./Photograph: Shutterstock

Subway’s “Eat Fresh Refresh” has apparently refreshed the brand’s sales.

The sandwich giant on Tuesday said that its U.S. same-store sales were up more than 4% in August over 2019. The company also said that its average unit volumes for the month were its highest in eight years—a result the company credited to its “Eat Fresh Refresh” rebranding and ad campaign featuring stars like Steph Curry, Serena Williams and Tom Brady.

Overall, the 4% same-store sales increase in August was lower than the industry average for the month. According to Black Box Intelligence, same-store sales rose 6.1% in August when compared with 2019. Total industry sales were 10% higher than they were in 2019, according to federal data. Numerous restaurant chains have seen surprising sales growth this year.

Most of Subway’s restaurants saw strong sales growth. The company said that the top 16,000 of its 21,000 U.S. locations generated an average same-store sales increase last month of 14%.

That implies the bottom quarter averaged a decline of 26% last month. Sources told Restaurant Business the biggest challenges at the chain have been at locations in malls, travel centers, airports and Walmarts, all of which have been hit hard by consumers shopping, traveling and working outside the home less often.

That also reflects the broader restaurant industry, where pockets of locations are struggling with weak traffic even as other locations—particularly those with drive-thrus and other easy-access points—have thrived.

Still, the results suggest the company is generating some momentum for the first time in years. The sandwich giant has closed 3,000 locations over the past three years alone, a period that has seen the company shed some $2.1 billion in system sales. It has also resulted in considerable pushback from franchisees, many of whom worry that they will lose their stores.

Even before the pandemic hammered sales in 2020, average-unit volumes were a still-low $420,000, according to Restaurant Business sister company Technomic.

The company has been making some massive changes in the past couple of years in a bid to get back to sales growth—including the hiring of CEO John Chidsey, an overhaul of his senior team and a pending addition of a second headquarters, this one in Miami.

The chain launched one of the biggest menu overhauls in the company’s history in July, including changes to its bread and ingredients and the addition of new sandwiches. It used a series of ads featuring sports stars to highlight the changes.

The ads appear to have worked: Subway said that 83% of 66,000 of its customers surveyed said they were fans of the menu upgrades.

The company has also rolled out direct delivery nationwide, a move marked by the company’s sponsorship of NASCAR driver Kevin Harvick.

Subway did not provide an interview for this story. But the company says that the August results have put it ahead of its sales plan, and noted that the top 5,000 restaurants in the system averaged a 33% rise in same-store sales for the month.

“The journey to build a better Subway has begun, and the changes are having a positive impact on restaurant sales,” Chidsey said in a statement.

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