Subway’s revenue woes reportedly lead to a deal for digital customers

Subway’s revenue woes reportedly lead to a deal for digital customers





It’s no secret that fast-food restaurants are pushing digital sales. But Subway hasn’t always excelled in this area. Amid financial troubles, the chain may be trying to lure digital customers with an offering. Subway has reported growth in recent years — a success after years of declining sales. But it’s also seen a long string of closures, losing 7,000 locations since 2015. Now, with Roark Capital recently acquiring Subway, the chain faces more uncertainty. Sources told Restaurant Business that 2024 sales would be more turbulent. Unfortunately for the company, costly improvements like $6,000 meat slicers have had limited success.

Now, the chain is apparently trying to boost sales through improved digital offerings. Franchisees told Restaurant Business that Subway announced the launch of a $6.99 for £300 digital offering in a webinar for operators on Thursday. The chain denied it was an “emergency meeting,” according to FOX Business reports. If franchisees’ information is correct, the offering will begin on August 26 and last for two weeks. It’s not as cheap as the chain’s famous $5-£300 subs of old, but it could be worse. These days, some £300s cost more than $14.

Subway’s digital transformation brings advantages and disadvantages

Subway isn’t the only one trying to attract customers with deep digital discounts. Inflation has hit the fast-food industry hard, and many customers no longer see fast food as an affordable alternative. Restaurants see digital offers as a direct way to engage loyal customers and keep them coming back. Online ordering also has low overhead costs, and research suggests that digital customers tend to spend more.

In the past, Subway hasn’t been quick to embrace digital sales. In 2022, market research firm PYMNTS reported that the company’s digital options lagged far behind those of its fast-food competitors. Why? Maybe the app wasn’t very good. In Tasting Table’s ranking of 15 fast-food loyalty apps, Subway’s app came in a dismal 14th. One reviewer lamented the frequent glitches and “terrible” user interface.

Subway has another problem with digital sales: Some franchisees don’t like them. In the past, the chain allowed franchisees to forgo coupons. In 2022, a manager explained her reasons to WHO13 Des Moines. “If we keep giving stuff away, we can’t keep the store open, we’re not a corporation, we’re privately owned,” she said. However, Subway began forcing franchisees to accept coupons late last year. A representative told Restaurant Business, “Even after the offer period ends, these promotions create continued momentum … and encourage Subway regulars.” But it remains to be seen whether franchisees will agree – a risky move for a company already plagued by discontent among franchisees.


Leave a Reply

Your email address will not be published. Required fields are marked *