Subway has experienced declining sales since 2014 and closed more franchises in 2016 than ever before, facing increasing competition from fast casual dining chains. The brand's image as health-conscious is attracting older women, but younger consumers favor fresher alternatives and improved dining experiences. Recommendations for Subway include focusing on premium ingredients, enhancing store designs, implementing a loyalty program, and addressing customer perceptions to combat declining consumer sentiment.

1. Subway:
Rethinking Eating
Fresh
Aub Driver
December 2017

2. What’s the problem with
Subway’s brand?
Subway’s sales have slipped year to
year since 2014.
In 2016, Subway closed more
franchises than they have in the 52
year history of the company.
Subway continues to receive bad
press and has many competitors
looking to take their market share.

3. Sales v. Ad
Spend
Sales 2016:
-1.7% ($11.3 billion)
Sales 2015:
- 3.4% ($11.5 billion)
Sales 2014:
-3.3% ($11.9 billion)
Ad Spend 2016:
$509 million estimated (-1.7%) AdAge
Ad Spend 2015:
$517 million estimated (-3.0%) AdAge
Ad Spend 2014:
$533 million estimated (+3.5%) Kantar Media

4. Research Objective Define what is limiting Subway’s
sales growth by using qualitative and
quantitative data to assess trends
and sentiments of consumers using
the current fast food market.
Through these findings, we’ll
recommend several options to turn
the brand around.

5. Research Questions RQ1) Who is Subway's target
customer?
RQ2) Why have Subway’s sales and
brand been affected by other fast
casual dining chain entering the
market?
RQ3) Do Subway locations matter or
is it all brand perception?

6. Research Questions
RQ1) Who is Subway's target
customer?

7. Syndicated
Research

8. Syndicated
Research

9. Secondary Research
Ad Age, 2016
National Restaurant News, 2015

10. Research Questions
RQ1) Who is Subway's target
customer?
Due to Subway’s image as a health
conscious quick service restaurant,
they attract white women, 45-54
who are homeowners with above
average income.
They’re seeking to invigorate their
younger customer base through an
ordering app and new design.

11. Research Questions
RQ2) Why have Subway’s sales and
brand been affected by other fast
casual dining chain entering the
market?

12. Consumers will pay
more for premium
ingredients
Syndicated Research

13. International flavors will
influence the sandwich
category
Syndicated Research

14. Consumers love meat
and bread
Syndicated Research

15. Consumer loyalty for
Fast Casual
outperforming Quick
Service
Syndicated Research

16. Consumer sentiment for Subway continues to decline while other
brands develop better customer service.
Reddit

17. Fast food sentiment by age range - Millenials, 18-24 want to spend money on fast
food
Syndicated Research

18. Qualitative Research
One on One Questions
When is the last time you ate at Subway?
“Subway is gross.”
- Female, 21
“I haven’t been to Subway in years.”
- Female, 28
“They had the pedophile, right?”
- Male, 22
“I like Jimmy John’s, it’s just fresher.”
- Female, 22
“I miss the $5 footlong. I haven’t bought
their food recently.”
- Male, 25

19. Research Questions RQ2) Why have Subway’s sales and
brand been affected by other fast
casual dining chain entering the
market?
Fast casual offerings have
outperformed Subway’s Quick
Service style with better value
perception.

20. Research Questions
RQ3) Does location matter for
Subway franchise or is it all brand
perception?

21. Subway Retail Stores Compared to U.S.
Syndicated Research

22. Subway Retail Stores Heat Map
Syndicated Research

23. Research Questions

24. 30 Days, Subway Facebook w/ Likes, Comments and Shares via Brand24
Secondary Research

25. Subway Facebook | Vegetarians vs. Carnivores works. | Reuben debuted
Secondary Research

26. Qualitative Research
Inside Fresh
Forward
Observing customers inside
Subway’s redesigned store.
Hillsboro, OR & Vancouver, WA
● Customers found the store
brighter, more open
● Tablets for ordering were a
confusing addition for
customers
● New soda and coffee additions
were big fan favorites
● Single USB charging station for
15 tables. Not a good sign.

27. Research Questions
RQ3) Does location matter or is it all
brand perception?
With over 26,000 locations in the U.S.,
Subway has a giant issue with the west
coast and southwest, along with the
central U.S. They’re clustered heavily on
the east coast, with numerous franchises
in the northeast.
Their social team is active, but they have
a lot of competition in each market.
Brand perception may be issue over
location.

28. Subway Insights and Suggestions Based on Findings
● Currently, Subway is designed for takeout as a Quick Service Restaurant. Fast Casual
restaurant offerings feature WiFi, USB charging and updated decor which equals added
value. In a tech-invested society, upgrades could help sales.
Fresh Forward restaurant design will help the brand, but only if stores can implement quickly
and have the right upgrades. Currently the upgrades are piecemeal.
● Premium meats and additional offerings equal greater profits for Fast Casual.
Subway needs to find fresh quality meats and better bread to compete with other brands. They
also have a huge chance to market to the Hispanic and African American customer base.
● Frequency and loyalty rewards via app can boost return customers. Millennials and iGen
are a necessary demographic.
No loyalty program currently exists via the app, though Subway is rumored to be rolling one out
for 2018.

29. Subway Insights and Suggestions Based on Findings
● Price value perception needs to be tackled soon with $5 footlong backlash. Quality
remains the same while competition improves.
Subway just announced a new $5 footlong, but franchises are losing money and angry with the
company now alongside consumers.
● Fast casual competition in same markets dilutes customer base seeking dining options
due to increase in spend for premium quality and decrease in fast food prices.
Subway is the same, new brands are getting more hype. Subway needs to assess the volume of
cannibalizing franchises in proximity to each other.
● None were more successful than Subway in the recession. Between 2007 and 2014, 6,500
stores were opened, a 30% increase over the existing store base. The $5 footlong was
THE food item for the financially strapped consumer.
Consumers have money to spend and they want quality product. Subway’s target audience is
willing to pay more for better.

30. “We’re still healthy, nutritious, fresh, affordable, delivering great sandwiches, but consumers are using
more technology and their expectations have changed. They still want what we give, which is that
nutritious, fresh, affordable product, but they want it in maybe a little different way.” - CEO Suzanne
Greco (QSR, November 2017)
“Over the last decade, Subway did not stay relevant and now needs a major transformation...We will no
longer just be adding more and more restaurants in the U.S. and Canada,” said Chief Marketing Officer
Joe Tripodi. “We want to make sure those existing restaurants are in the right place and the
development agents and franchisees are profitable and their business is sustainable.”
Questions?Take our survey: https://syracuseuniversity.qualtrics.com/jfe/preview/SV_55cvhQVz7hQXqId?Q_CHL