The Middletown Press (Middletown, CT)
Subway looks to stem tide
New look, technology aim to bring customers back
Subway, with more locations than any other restaurant chain in the world, is hoping a redesigned store and new leadership can help slow what has been a continuing slide of closing restaurants.
Since the start of the year, the Milford-based chain has launched a series of campaigns focused on reeling customers back into franchise locations, starting with a new loyalty program that offered enhanced incentives.
“It’s not changing or rebranding; it’s modernizing those core elements,” said James Walker, vice president of Subway’s North American operations.
Along with the rewards program, the company debuted its latest and largest initiative — the Fresh Forward design in almost 400 locations globally.
The recently reopened Brookfield restaurant at 814 Federal Road was among those to adopt the new decor, which includes a new display, brighter colors and four-screen digital menu.
The restaurant was the first in Connecticut to feature the modern design, which has accompanied an uptick in the chain’s use of technology within its stores.
From free Wi-Fi and charging stations built into seats to mobile phone-apps and menu kiosks for customers to order from, Subway has continued to integrate technology that is meant to improve the customer experience within restaurants, Walker said.
The overhaul to the look, feel and offerings are part of a modernization of the core brand elements that allowed Subway to become the largest restaurant chain in the world from a unit standpoint.
“We’re looking at what we can do to accelerate those features and really move to the front of the pack, because that’s where brand Subway belongs,” he said. “I do think it’s a big part of Subway today and it will be a bigger part of Subway tomorrow.”
Troubled times
The revamped features arrive at a difficult moment for the company. For four consecutive years, domestic sales have slumped causing the number of locations to decline.
After shuttering more than 800 stores in the U.S. market last year, according to Bloomberg, the Milford-based chain is expected to lose hundreds more this year, which has ultimately led to the revitalization efforts expected to the stymie the downturn.
“Now is about an overall brand strategy,” Walker said. “The focus of the organization has not changed. How we are going to achieve the desired result is going to change.”
In the U.S. alone, Subway had more than 25,000 franchises — and almost double that globally. But at the start of the year it was announced that it would be closing 500 domestic locations.
The revamping of restaurants comes as Subway leadership looks to relocate and consolidate hundreds more locations.
“We’ve evaluated every unit in our system,” Subway spokesman Kevin Kane said in an email. “A number of them are candidates for relocation. We’re expecting to double the number of relocations this year, and that gives us the opportunity for new real estate and the possibility of capturing freestanding buildings, which tend to be larger investments, but result in high-volume, profitable restaurants.”
Looking out over the next decade, the restaurant chain will be looking to increase profits with its smaller footprint in North America, while increasing its global footprint.
The U.S. market may have hit capacity, but overseas there appears to be plenty of room for growth. With more than 40,000 locations throughout the world, Subway is planning on adding 1,000 new stores.
“We’re very focused in growing the brand, growing market share and growing franchisee profitability,” Walker said. “The difference is now we have more tools. We have a more sophisticated management team. We have more arrows in the quiver to make that happen.”
Markets like India and China, among others, have growth potential in unit count, Walker said.
At the same time, the company is undergoing its biggest change as it searches for a new CEO following Suzanne Greco’s retirement announcement in May after 40 years with the chain.
Chief Business Development Officer Trevor Haynes, who has been with the Subway for more than 10 years, is serving as interim CEO while the company looks to find a permanent successor.