Subway ’s new track
Sliding chain taps Bain to plot future
Subway, the struggling familyowned sandwich chain, has hired consultant Bain & Company to professionalize operations and possibly set itself up for a future sale, The Post has learned.
The 52-year-old chain, the largest in the US by the number of locations, had previously resisted bringing in outside professionals for anything other than advertising, according to two Subway insiders.
Perhaps because of that insular culture, Subway has posted declining same-store sales for more than five years.
The downturn sparked feuds with many of its struggling franchisees.
Last month, Chief Executive Suzanne Greco, the sister of Fred DeLuca, the late Subway founder, resigned. Trevor Haynes was named interim CEO.
Haynes is currently on a listening tour of stores and franchise owners.
“I think hiring Bain signifies that the board needs a professional business organization to give advice so it can change its downward trend,” one Subway insider said. “They are running out of options that might positively impact the company.”
Same-store sales in May fell 3 to 4 percent from a year earlier, according to John Gordon of Pacific Management Consulting.
Customer traffic plummeted a whopping 25 percent from 2012-17, according to a Nov. 30 internal Subway memo.
To turn things around, Subway has been promoting a $4.99 foot-long sandwich, something it had done often in the past — but that has irked many franchisees because it is hard to make money on such a promotion. Plus, it does not seem to be working, sources said.
“It’s business as usual, $4.99 and no imagination,” the insider said.
“The promotion doesn’t work well in my stores,” one New York store owner told The Post. He has closed four of 10 stores over the last three years.
Meanwhile, the two children of the chain’s founders, both on Suway’s 10-person board, do not want to run the chain and would rather stabilize operations and prepare it for a sale, sources said.
DeLuca ran the chain for 50 years — until he died in 2015.
“This [hiring someone like Bain] should have been done when Fred was dying,” Gordon said. “The system is worse off now than it was three years ago.”
A Subway spokeswoman said the owners have no plans to sell the chain.
“The shareholders have expressed their intentions to the employees of the company that they are investing in the future of the company,” the spokeswoman said.
Subway declined comment on hiring Bain.