

The rise and decline of Subway, the world’s biggest food chain - kareemm
https://www.thestar.com/business/2015/05/31/the-rise-and-fall-of-subway-the-worlds-biggest-food-chain.html

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firebones
It is illustrative to read through some of the franchisee message boards where
Subway owners talk. From what I recall, the margins are incredibly low and
profits hinge largely on "combo" chips and drinks deals.

Subway is getting hit high and low: high from fast casual, low from
convenience stores which can add in sandwiches made on premises (small
remodels, no rent or significant additional overhead, ability to leverage
existing business infrastructure).

Minimum wage laws will sink a lot of these franchises soon. One immigrant-
owned Subway in my area seems to be surviving only by stretching vacation visa
laws with a rotating cast of visiting relatives working the line. It's no
coincidence that it is in the same strip mall as a couple of nail salons.

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whoopdedo
> convenience stores which can add in sandwiches made on premises (small
> remodels, no rent or significant additional overhead, ability to leverage
> existing business infrastructure).

All the Subways around where I live are part of a gas station & convenience
store.

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Mithaldu
Imo Subway is losing because it's the world's slowest fast food. I do enjoy
Subway, but (at least here in germany) you can't get it delivered, and the
process of pondering and ordering and watching them slowly put it together is
excruciating and pointless exercise in standing around and wasting time,
especially when you've watched it 4 times already with the people in front of
you.

~~~
douche
Subway is a subpar sub shop at best, and it no longer really has the advantage
of being pretty cheap (remember $5 footlongs? Not so much anymore).

This may be a Maine thing, as I haven't noticed it as much in other states,
but I would much rather go to a mom & pop gas station/general store and order
an Italian than go to Subway. It's superior in every way: faster, cheaper,
better ingredients, more toppings. Of course it doesn't really scale...

~~~
joshuapants
I would certainly rather go to a Wawa than a Subway, though regrettably the
closest Wawa to me is half an hour away. Luckily there is no shortage of
independent sandwich shops near me, but sometimes I really just want the Wawa
experience.

~~~
covercash
I actually think Wawa quality is about on par with Subway these days. First
they started using pre-sliced meats, now they bake lower quality rolls in the
store (they have a chewiness to them, much like Subway rolls). The only thing
that's better is their ordering process and even that bottlenecks at the
register. They should add payment processing directly to the touch screen
terminals.

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tedunangst
Another consequence of people caring more about how than what. They don't want
good rolls; they want fresh rolls. "Made on site!"

~~~
jessaustin
Yes declarative sandwich-ordering is superior to the imperative variety. It
certainly seems so when someone picky (or worse, someone on the phone with
someone picky) is ahead of me in line.

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DigitalSea
The truth is, Subway only do a few limited options and they do them rather
poorly. It's still at the end of the day no matter what combinations you come
up with (like meatballs) just a sandwich, one that seemingly takes forever to
make and in my opinion is quite pricey for sub-par frozen ingredients full of
preservatives.

Subway lacks innovation. For a chain that can operate inside of shipping
containers suspended by crane on high-rise construction sites, they seem to
lack the foresight to improve their lengthy process for making a sandwich.
Every Subway store you go to seems to be understaffed which just adds to the
wait time.

Here in Australia if you go to a McDonald's in a metropolitan area you're
literally stepping into a restaurant. They take your order, they seat you and
then bring out your food on a wooden board (chips come in a basket). Compare
that to Subway, where you stand in line while you watch a student make your
sandwich (sometimes in a hasty way) only for the end result to either be cold
because they're understaffed or fall apart if you take it out of the wrapper.

I like Subway, but there are arguably much better sandwich shops out there.
When I was in Seattle for work a few months ago, Jimmy Johns was my go to.
They only do a few sandwiches, but they're really fast, cheap, customer
service is great and their sandwiches taste really fresh (something you can't
say about Subway).

~~~
NamTaf
>Here in Australia if you go to a McDonald's in a metropolitan area you're
literally stepping into a restaurant. They take your order, they seat you and
then bring out your food on a wooden board (chips come in a basket).

Pardon? In every single McDonalds I've been to here, you now place your order
and get given a numbered ticket. You then loiter at the counter until your
number comes up and you can collect it.

~~~
DigitalSea
What part of Australia are you in? It's not all stores, but McDonald's have
started turning their Australian stores into restaurants. Gone are the days of
taking a number and waiting around for your grease stained paper bag. I am in
Brisbane (Queensland) and a few of the McDonald's in my area have this "Create
Your Taste" in which you can actually build your own burger and meals from a
massive touch-screen if you like. The burger comes out on a wooden like
chopping board and the chips in a basket, similar to how your food comes out
somewhere like Grill'd. [https://mcdonalds.com.au/create-your-
taste](https://mcdonalds.com.au/create-your-taste) \- this article on
Lifehacker shows you what the new McDonald's is like now:
[http://www.lifehacker.com.au/2014/10/taste-test-inside-
mcdon...](http://www.lifehacker.com.au/2014/10/taste-test-inside-mcdonalds-
futuristic-restaurant/) (Ignore the part about it only being available in a
single store, there are a few of them around now.)

It's funny in the US McDonald's in particular is struggling as well as Subway
and others in the face of upstarts like In-N-Out burger, but here in Australia
McDonald's is innovating and becoming the benchmark for a new kind of
McDonald's.

~~~
NamTaf
Brisbane, but I also speak for my experiences in Melbourne and Sydney in the
last ~year, as well as smaller cities such as the Gold Coast, Mackay,
Rockhampton, Albury and several others more recently than that (when I travel
for work).

I cannot remember ever having a McD's employee bring me my meal when seated.
For as long as I can remember (nearing a decade) it has been pick-up-over-
counter, with the more recent addition of having a number on your receipt with
a screen showing when your order is ready.

My local one has the Create Your Taste but I've not yet been to it. That only
appeared in the last 1-2 months for me (Annerley). The fact that they're doing
create your own was impressive enough to me but if they're now serving it to
you at a table then that's pretty incredible. They've spent so much time
nailing down their service times that I would have thought the staffing
limitaions on running food out would be too high. I have to hand it to them
for their efficiency.

edit: I've not yet been to one with the Create Your Taste thing, by the way.
If the service at table is limited to those, then that explains it. But
equally, I've only seen that at a couple of outlets too so I wouldn't exactly
call it widespread here.

~~~
yitchelle
The only time I had my burger brought to my table was when I had wait for my
burger to be made. This was in a Melbourne McD back in ~2009. I hope if McD
increase the minimum wage if they are introducing table service as well.

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Hominem
Subway has a brand problem,most people no longer want the cheapest food around
and those that do will go to food trucks or places more "authentic". Subway is
now viewed as everything wrong with American food.

For one thing, it is insufficiently "artisanal" for today's consumers. If I
was opening a sandwich shop, I would actually offer less options. I would
offer a "curated" selection of sandwiches, changing daily/weekly, based on
local ingredients. I'd charge 10-12 for a 6" inch sandwich.

~~~
patio11
If you ever decide to execute on Artisanal Sandwich Shop Inc, I highly
encourage you to speak to someone with restaurant experience prior to doing
so. It seems that everyone has the idea "I know, I'll just move up the
price/quality curve from fast food." Chipotle succeeded at that... and they're
not in very good company.

Briefly, the reality of fast food in America is that that they're sustained by
poor people who use them for 10+ meals a week rather than by middle class
people who use them for 1~2 meals per month. If you charge a multiple of the
fast food pricepoint, you have to locate the store somewhere where you can get
high traffic of well-heeled customers. That implies expensive real estate. A
lot of stores get broken by it simply being impossible to sell enough $10
foozits to cover the rent necessary to sell a single $10 foozit.

Running a restaurant, QSR or otherwise, is by all accounts a brutal business
to be in. I think the number usually quoted is 6% margins for the business
owner -- i.e. if you sell $1 million in artisanal sandwiches in a year, you
make $60k. You will be cutting a lot of bread yourself to earn that.

~~~
Hominem
You are right, I have no idea of the economics and would probably fail
quickly.

I wouldn't try to open it not where rich people live or work, but a marginal
area that serves as a destination for after work drinks and the like where
there is some sort of scene. Someplace like Red Hook in Brooklyn.

Maybe do cross promotion with other local artisans as well.

Really, I don't want to run a restaurant, I just want good sandwiches. I'll
stick to supporting good sandwich shops.

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hahamrfunnyguy
Subway's bread is awful, which pretty much kills the sandwich.

In my neck of the woods, there's a couple local chains that do subs right and
dozens of local mom and pop stands. Subs are one of the harder things to screw
up, yet Subway somehow manages to do it and then charges $6 for a tiny sub
with soggy bread and flaccid vegetables.

~~~
madengr
Ditto, subway bread is horrible. Jimmy John's is much better.

~~~
Larrikin
In my experience, I have never gotten a sandwich I would consider bad at
Subway. But I have always felt that I could get a better sub if I went to any
other sub shop. A sub that I would consider good. Subway defines mediocrity.

Jimmy Johns is still the only sub place I've been to that I've felt was just
as bad as Subway. Its almost an accomplishment, the subs taste totally
different but equally as mediocre and a place I avoid if I can.

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untog
It's interesting, I'd say that Subway were absolutely ahead of the game when
it came to healthy eating - and made moves that chains like McDonalds haven't
even matched yet.

Maybe that's the fate of all these chains - you innovate to get in front, then
you go stale. I'm sure it'll happen to Chipotle eventually, too.

~~~
jessaustin
Innovation is part of it, but in the Subway example you see another
phenomenon, which one could call "profit-taking" in analogy to the financial-
media cliche. That is, a decade ago when Subway was in growth mode, they
didn't want anything to prevent new franchisees from signing up. They kept
their fees and ingredient prices low, and the low prices were passed on to the
customer. The parent company probably didn't worry about profit during that
time. Now they feel like they have enough franchises, and it's time to make
some money. When prices are raised, the parent company makes more money, even
though the franchisees probably make less, because they get a similar
percentage on lower volume. Franchisees make up for that by getting really
cheap, especially on labor. Because people are creatures of habit, there are
still customers, even now that the same crappy sandwich that used to be $3.50
is now twice that.

Eventually Subway will be like Arby's (maybe KFC is like this now as well):
such a bad deal for so long that no one goes there anymore. Perhaps like
McD's, Taco Bell, etc. have in the past they'll be able to get investors
interested in supporting a cycle of lower costs.

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linker3000
I walk down an alleyway next to a Subway every day on my way to work and all I
can smell is some sour/yeasty/herby concoction that doesn't inspire me to want
to go in. I think I've been in a Subway shop about 3 times in my 49-year life.

~~~
AaronIG
I worked at a Subway while in high school, and I agree the smell is not very
inviting. Even the dough, once thawed, has a strange odor to it, though the
biggest cause of that funky odor you smell is the bread proofer located
beneath the oven. It circulates warm moist air around the bread to help it
rise. The thing is, it's not cleaned regularly (at least it wasn't at three
different stores I worked in), and when left unchecked mold forms on the
bottom.

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ourmandave
I like Subway because it seems healthier than McD's, et al. and it's
predictable (like McD's).

But lately there's a certain price point which they seem to have exceeded
that's sending me back to drive thrus.

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r00fus
I really liked Subway back in my college days in the 90s. What I don't like
for the past decade is that I found I'm somewhat sensitive to gluten and have
cut any unnecessary sandwiches from my diet.

Ostensibly, Chipotle (and even Taco Bell) can offer me a meal that's
relatively gluten free (and even low on carbs for the carb-conscious).

I wonder if the Atkins anti-yeast anti-carb and simultaneous gluten free
awareness efforts are impacting the chain?

Is Panera Bread doing well, while Subway isn't? Why?

I know they did have some ok-tasting atkins-compliant wraps a while back, but
not sure anymore.

~~~
brador
What is your reaction to gluten? What happens?

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r00fus
Fairly allergic, skin breakouts and general nausea, some congestion. Allergy
tabs help me cope if I have no choice.

Got a friend with nuts/eggs allergy and it's the same - we shared notes that
cetirizine is quite effective for both of us.

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mpg33
One of the bad things about Subway is it is very slow. I have been in lineups
at Subway of probably only 4 people and it can be at least 10mins before you
get your food. Thats a life time in a "fast food restaurant". If it's busy
during lunch...forget it. Also it isn't that cheap if you get a footlong +
drink combo.

Also with more health conscious people these days and popular diets such as
keto and paleo subway isn't that healthy. Your meal is basically 50% (or more)
bread.

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bbatchelder
Subway used to be a go-to option for me when I was craving a sandwich. Now,
I'd only go there if there was no other option.

Far superior options, IMO:

* Publix deli subs * Jimmy Johns * Firehouse * Wawa

~~~
toomuchtodo
Florida area?

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webdevsblow
What is going on with that web page? The browser gives some security warnings
and only the headings load. Is this another shining example of modern web
excrement where we are required to let things run rampant in the browser just
to view an article?

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linker3000
Did anyone else get a few seconds of autoplay sound/advert?

Something fired up on my tablet (Boat Browser on a rooted Samsung running
adaway), but before I could investigate it stopped again.

