Technomic study: Sandwich chains grow despite economy

 
Jan. 4, 2009
CHICAGO — A number of top limited-service sandwich chains overcame the downhill economy by exhibiting growth, reports foodservice consultancy Technomic. The new "2008 Technomic Top 100 Limited-Service Sandwich Chains Restaurant Report" found that in 2007, Subway added nearly a half billion dollars in revenues and 440 new units over the prior year. Quiznos registered the second highest sales growth, with $261 million and 178 units.
 
"Though the economy has moved from bad to worse, the limited-service sandwich segment is holding its own," said Darren Tristano, executive vice president at Technomic. "Its resilience comes from its ability to provide customers with a range of offerings from low cost to high end. The top 100 sandwich chains have displayed an array of tactics for weathering the economic storm — from revising their pricing strategies, to making menu offerings more memorable and substantial to renovating their stores."
 
The report identifies the leading limited-service sandwich chains, analyzes top performers by sales and units, looks at important trends in the segment, and provides insight into where limited-service sandwich opportunities exist. Interesting findings include:
  • The limited-service sandwich industry totaled $21.2 billion in sales in 2007, of which the Top 100 accounted for $18.8 billion, or 89 percent of the total.
  • Sales for the Top 100 grew 6.4 percent, outperforming the overall sandwich industry's growth of 5.7 percent. Unit growth of the Top 100 was up by 1.8 percent for a total of 38,790 units, compared with growth of 1.6 percent for the limited-service sandwich industry with a total of 55,610 units. The Top 100 makes up nearly 70 percent of the industry's units.
  • Subway led the category with sales of more than $8 billion, which accounted for 43.5 percent of total Top 100 sales. Arby's followed with an estimated $3.3 billion in sales, comprising 17.6 percent of Top 100 sales. Rounding out the Top three is Quiznos Subs with an estimated $1.9 billion in sales, or 10 percent of the Top 100's total.
  • Within the limited-service sandwich segment, the Sub, Deli and Sandwich sub-categories represented the greatest number of concepts. Sub-categories with the highest 2007 sales were Sub at $12.2 billion and Roast Beef at $3.4 billion. The Sandwich and Deli sub-categories showed the greatest percentage sales growth, with 19 percent and 11.1 percent respectively.
  • Limited-service sandwich restaurants are focusing on making ordering easier. Within the Top 100 chains, 27 percent of chains have implemented online ordering at all or select store locations. Delivery is available at 24 of the Top 100 at some or all stores.
In addition to analysis, the report provides appendices that list the Top 100 limited-service chains alphabetically, ranked by sales and units and ranked by the chains' share of sales within each sandwich cluster.

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