WHAT’S UP WITH THE SUB?
Subway is freshening up its offer.
It isn’t just the brighter, modern next-generation stores that are giving Subway a fresh burst of energy; innovative retail solutions and delivery are a boost to the popular sandwich chain.
By the end of this year, close to 40 per cent of the nearly 1300-store Subway network will be sporting the next-generation store livery. It’s given the much-loved brand a refresh, says Aussie boss Geoff Cockerill.
The size of the business, with around 1000 franchisees and over 15,000 staff, means the network is serving more than 70 million guests annually.
“We’re always striving for guest experiences,” says the Subway Australia country manager. And that means reaching the customer wherever they are.
Data is showing a store’s average transaction is higher in delivery – traditionally, people at home or in the office are ordering multiple meals.
“Delivery is absolutely critical in QSR, it’s what customers are demanding. What we’ve done is got highly competitive national agreements with DoorDash and Deliveroo in addition to Uber. Guests tend to use a single platform and they may not shop around. Our focus is on the right delivery in the right areas. We need to ensure we’ve got the biggest footprint.
“We can negotiate competitive rates, and we have a heavy weight of programs to support third-party activities.”
This paid off during the pandemic, which saw Subway step up and provide lease negotiations support and, crucially, franchise fee relief.
While a number of restaurants were temporarily closed during the pandemic – notably CBD and airport stores – Geoff reports that many are reopening or taking the opportunity to relocate within their current centres.
He says the chain has been a victim of its own success when it comes to location.
“It has the largest QSR footprint in Australia and over 30 years, inevitably that means restaurants are not in the right place. In the past few years we’ve focused on relocating restaurants.”
Already with the biggest fast food footprint in Australia, Subway is in a unique position to negotiate with landlords to achieve favourable results for franchisees, he suggests.
“We are going to grow this year.
We’re focusing on incremental growth, on occupancy costs and on franchisee profitability.”
Innovations on the retail front are part of the business’s progression. There is a kiosk option, food court models, and a grab-and-go trial was started and halted during Covid – this will be best suited to busy hubs and CBD sites. The latest innovation is a 24 hour pick-up concept.
“It’s a brand first for us, we found a guest-driven need, a high demand for late night, early morning orders. Covid has meant people are working different hours.” So far it is exceeding expectations.
Big service station sites on highways are another retail option.
What will be common to new sites will be the need for delivery to be integrated into the service.
New locations will follow demographic shifts. Obvious moves are the southern corridors such as those in south-east Queensland, and the corridors from Sydney’s Northern Beaches to South Sydney.
“We are feeling extremely positive about the brand, there is really strong momentum, and we are proud of the foundations put in place pre, during and post-Covid. Now we are setting up for success.”
The US-based chain has been in Australia for 33 years. It recently was awarded a 4-star franchise rating by independent firm FRANData.
Geoff says, “I think what helped us was the results are reflective of a long history and success over 30 years in Australia. It’s tested and proven, there is operational support, we’ve had a whole raft of things for a long time that we are always revisiting and refining.
“Covid certainly sharpened us up, our field teams couldn’t focus on restaurants so they took time to look at the business and that has led to positivity; the momentum is staying with us.”