Sub­way look­ing to up­date stores’ not-so-fresh look

Kuwait Times - - BUSINESS -

Sub­way wants to freshen up the look of its stores as it tries to stem a sales de­cline. The sand­wich chain says the re­design - which in­cludes a brighter at­mos­phere, dis­plays of veg­eta­bles be­hind the counter and or­der­ing tablets - is the first ma­jor re­vamp since the early 2000s. The changes will take place as stores around the coun­try are re­mod­eled and new ones are built.

The makeover comes as Sub­way’s sales have fallen for four straight years amid com­pe­ti­tion from places in­clud­ing Jimmy John’s and Fire­house Subs. Since 2012, Sub­way’s av­er­age an­nual sales per store are down 13 per­cent at $420,000, ac­cord­ing to in­dus­try tracker Tech­nomic. Last year, its num­ber of U.S. stores also shrank for the first time, though it still had more than 26,700 lo­ca­tions. Don Fert­man, Sub­way’s chief de­vel­op­ment of­fi­cer, says fran­chisee agree­ments re­quire them to re­model stores ev­ery seven to 10 years. Fert­man says the cur­rent “Tus­cany” de­sign was in­tended in part to re­flect the Ital­ian her­itage of founder Fred DeLuca, who died in 2015. His sis­ter, Suzanne Greco, is now CEO of the pri­vately held com­pany.

“It’s been work­ing for us since the early 2000s,” Fert­man said, but noted that it was time to evolve. In the US and Canada, new stores will be built us­ing the re­design. About 150 stores will get the new look in the com­ing months, Fert­man said. By the end of next year, he said 3,000 to 5,000 stores glob­ally should have it, with most of those be­ing in the United States and Canada.

Some have reser­va­tions about the plans. John Gor­don, a restau­rant in­dus­try an­a­lyst, said Sub­way might be bet­ter off fo­cus­ing on im­prov­ing its food be­fore turn­ing to re­mod­el­ing, given the tight fi­nan­cial sit­u­a­tions of many fran­chisees. While the com­pany hasn’t yet spec­i­fied the cost, the re­mod­el­ing looks like it will be pricey for fran­chisees, notes Keith Miller, who has three Sub­way stores in North­ern Cal­i­for­nia. Miller, who is also head of the Coali­tion of Fran­chisee As­so­ci­a­tions, said two key ques­tions are whether re­mod­el­ing would boost sales, and whether fran­chisees can af­ford it. If fran­chisees can’t af­ford it, Miller said it’s not re­ally a so­lu­tion. “How do you re­quire some­one to do some­thing that they can’t fi­nan­cially do?” he said. —AP

In this Jan­uary 2017 photo pro­vided by Sub­way shows the in­te­rior of a re­mod­eled Sub­way store in Knoxville, Ten­nessee. —AP

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