‘It’s really the biggest refresh in the 56-year brand history,’ CEO Chidsey says
Subway has overhauled its menu. Big-time. CEO John Chidsey told CNN that the new menu items are a deep dive into healthy, craveable fare, a move to lock horns with competitors who have already jumped on the better-nutrition bandwagon. During that interview, Chidsey said that consumer research indicated the need for innovation, something the brand had slacked on for about five to six years. So during the past 15 to 16 months, the huge sandwich-shop franchisor has worked to upgrade its turkey and ham as well as come up with new bread products and additional core ingredients.
“Between new sandwiches and upgrades to core products, there’s about 20 new things that we’re going to expose to our guests or consumers, so it’s really the biggest refresh in the 56-year brand history,” he said. “It’s a very innovative industry, and you constantly need to refresh to stay fresh. … What we really want to do is demonstrate to our guests and consumers that Subway is back on top of its innovation game.” Subway was rolling out the new offerings on July 13.
Chidsey said that to try to avoid raising prices paid by customers, the redesign has incorporated changes in packaging and other cost-cutting practices. But he conceded that with inflation running high at present, there will be some pressure to increase prices. He said it is too soon to predict how much prices might rise, however, and whether – or when – they might be rolled back.
Like nearly all restaurants, Subway franchises, which were particularly challenged during the pandemic because they have no drive-through lanes, pivoted because of the pandemic. The countermeasures have been successful, Chidsey said. The company posted a 217% increase in digital sales since 2019, he stated, and third-party delivery sales have risen 260%. “I would argue Covid was actually an accelerant in pushing the business where it was already headed,” he told CNN. “Franchisees are very happy and thinking of the investments that we’re making in that space.” Globally – not just in the United States, but also in Asia and Europe — during the first six months of 2021, “The entire brand has been positive… not just against 2020 but against 2019,” and Chidsey said “I’m encouraged” by that momentum.
He also discussed the problems that Subway franchisees, like nearly all U.S. restaurants, have faced in trying to fill employee vacancies. “The one advantage we have on our restaurant footprint, though, is we’re a much smaller footprint so we need less labor than other people. And one of the things we did, knowing we had this refresh coming – we got out in front of it in May on our digital app and pushed heavy for hiring, and we were able to hire about 40,000 people in that time frame so that helped.”