Marketing

Subway ending its $4.99 footlong promotion

The sandwich is ending the controversial campaign in exchange for locally based offers.
Photograph courtesy of Subway

Subway’s controversial, $4.99 footlong sub promotion is ending this month, at least on a national basis, as the Milford, Conn.-based sandwich giant focuses on market-based promotions.

The company said that local markets will lead their own price-based initiatives, with some markets keeping the $4.99 price point as part of a menu of 12-inch sandwiches “starting at $4.99.”

Others will shift to different offers, such as Sub of the Day or offers based on dayparts, a company spokeswoman said Monday.

The company said that the promotion, along with the introduction of new Signature Wraps earlier this year, “has helped to drive positive sales and profit growth for franchise owners.”

However, the company said, “as with any promotion, we consistently listen to our franchise owners, evaluate and evolve our offerings to provide franchisees with pricing flexibility, while still offering a compelling price point to our guests.”

Subway began selling a selection of 12-inch subs at $4.99 early this year amid a competitive fast-food market. Numerous chains, from McDonald’s and Burger King to Pizza Hut and Sonic Drive-In, have been pushing lower-priced items as consumers eat out less frequently, at least at chain restaurants.

But franchisees protested the promotion, which to them was a return to the company’s longtime $5 footlong promotion that ended in 2014. While that promotion helped generate sales for years, costs for food and especially labor have made it difficult for operators to generate a profit off of the sandwiches’ sales.

The company has undergone a number of changes ever since. CEO Suzanne Greco retired in May, replaced by Trevor Haynes. And the company is investing in a modest brand refresh over the next two years even as it works to encourage franchisees to make a fuller, larger remodel to their restaurants.

Subway is working to reverse years of sliding sales and traffic that have taken a toll on the company’s massive haul of locations: Unit count declined by more than 800 last year, according to Technomic data, while system sales fell 4.4% to $10.8 billion.

Chains such as Taco Bell and Chick-fil-A are now threatening to overtake the company as the nation’s third-largest restaurant company by system sales.

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