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Will breakfast work for Subway?
November 11, 2009
Subway continues to its campaign to overtake McDonald's in its number of worldwide locations and is working to capture some of the burger giant's market share at breakfast. Earlier this month, Seattle's Best Coffee announced that the sandwich chain would be selling its coffee in 9,000 of the chain's 22,000 plus U.S. stores.
But an article in Advertising Age points out that it may take a lot more than good coffee to wake up Subway's breakfast traffic in a daypart that has brands from McDonald's to Dunkin' Donuts testing value menus to boost sales.
From Advertising Age:
Price isn't even the major hurdle. The biggest problem is getting people not to think only about $5 footlongs when they think of Subway. 'To some extent to be successful, you have to disrupt the consumer's behavior with a compelling reason to change it,' said Darren Tristano (of) Technomic. 'And price isn't an issue anymore because everything is cheap. It has to be about quality, freshness, or something different like oatmeal or an organic product.'
Some Advertising Age reporters visited a local Dunkin' Donuts and Subway for breakfast. At Dunkin' Donuts, the store was busy with customers buying coffee and donuts, but few breakfast sandwiches.
Conversely, Subway's breakfast offerings include egg and cheese, egg and ham, Western omelet with ham, and egg and double bacon sandwiches on either a sub roll or flat bread. But few customers were at the store the morning of their visit:
Perhaps the most trying part of the experience is watching the 'sandwich artist' pull a yellow, rubbery-looking disk from a warmer and fold it inside of a sub roll. We didn't expect farm-fresh eggs, but some things are better kept out of sight.There's another odd moment when you're asked which toppings, many of which most consumers currently associate with their $5 footlongs. But it all ultimately winds up in a warm, 6- or 12-inch sandwich that's crunchy on the outside and gooey on the inside. But do the ends justify the means?Mr. Tristano said it comes down to how far you can stretch your brand. 'I can't think of too many submarine sandwich chains that have had success at breakfast,' Mr. Tristano said. 'Consumers don't seem to be gravitating to those locations, they're gravitating to the Dunkin's and Paneras in the bakery-café segment.'
International growth
Still, plenty of franchisees are eager to open the chain's sandwich shops. From the beginning of July through the end of September, the Subway chain reached several new development milestones, including:
- Surpassing the 400-store mark in Mexico
- Opening its 300th restaurant in Brazil
- Reaching the 1,100th store milestone in the state of New York, 500 locations in Washington and 400 each in Arizona and Colorado
In the third quarter, franchisees opened a total of 581 new locations around the world, bringing the chain's total store count to more than 31,800, including more than 9,000 restaurants in international markets.
In the non-traditional development category, the Subway chain now has more than 7,200 locations in places such as airports, department stores, hospitals and park and recreational facilities. Recent openings include a store inside a Gold's Gym in Mumbai, India; the Royal Brisbane Woman's Hospital in Australia; the University of Pennsylvania campus in Philadelphia; the Michael-Ann Russell Jewish Community Center in North Miami, Fla., which provides a kosher menu; and the Tioga Downs Casino in Nichols, N.Y.
The past few months have also resulted in a number of awards and accolades for the Subway brand. In Australia, Subway was named Retailer of the Year in the restaurant category by the Australian Retailers Association. Closer to home, Subway was ranked as the No. 1 favorite fast food restaurant in Atlas Van Lines' annual King of the Road survey of professional long-haul moving van operators.
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