Differentiation, focused positioning drive strong sandwich sector

Differentiation, focused positioning drive strong sandwich sector
November 10, 2009

The Top 100 limited-service sandwich chains grew sales in 2008 by 8.6 percent to $20.3 billion, according to restaurant industry consulting group Technomic.

Gains were driven by industry leader Subway, with strong execution of its $5 foot-long promotion and value positioning resulting in a 17.1 percent increase in sales to $9.6 billion. The Top 100 outperformed the limited-service sandwich industry as a whole and posted sales of $22.6 billion systemwide, growing by 6.9 percent.

The sandwich-sector findings are detailed in a new study from Technomic, the 2009 Top 100 Limited-Service Sandwich Chains Restaurant Report.

"The limited-service sandwich chains that continue to perform well have conveyed a strong value equation to their customers — from craveable flavor profiles to reasonable pricing to convenience of ordering," Darren Tristano, Technomic executive vice president, said. "Given the challenging economic environment, leaders should understand the shifting expectations of their customers and be prepared to make the necessary changes to remain relevant, while keeping a watchful eye on margin erosion concerns."

Some of the trends, chains and products examined in the report include:

Subway's value-driven menu strategy
Jason's Deli's healthy approach to sandwiches
Which Wich's customization
Jimmy John's promotion of convenience with delivery options
â€˜wichcraft's gourmet, high-quality menu positioning

Other interesting findings include:

The Top 100 sandwich chains grew units by 1.8 percent in 2008 to more than 39,000 locations, outperforming the sandwich category's overall growth of 1.4 percent and the total limited-service restaurant industry's unit increase of 0.6 percent.
Subway led the sandwich industry in unit growth, adding 686 new locations in 2008. Atlanta-based Rising Roll Gourmet had the highest rate of growth at 71.4 percent, bringing its total to 12 units.
Menu trends among the Top 100 chains include use of flatbreads and premium ingredients, bolder flavor profiles, new hot panini-style sandwiches, healthier offerings and the use of natural, organic, local and sustainable sandwich components.

The report was designed to help restaurant operators and foodservice manufacturers identify opportunities for growth, understand current trends, develop sales and marketing strategies, and analyze top performers by sales and units. Comprehensive appendices include profiles of individual chains and lists of the Top 100 sandwich chains sorted alphabetically and by sales and units.