- Subway launched a menu overhaul with TV spots featuring sports icons like Serena Williams.
- The makeover is a ‘last-ditch effort’ for the struggling fast-food chain, one analyst said.
- Subway franchisees say they’ve raised menu prices anywhere from 10 to 40 cents per sandwich.
Subway is spending big money on sports legends like Charles Barkley and Serena Williams, who are hawking the virtues of a recent menu overhaul in new TV spots.
But some franchisees and one industry analyst say that the Eat Fresh Refresh menu revamp, which includes adding new deli-thin meats and better-tasting bread, might not fix the broken chain. Subway has struggled with hundreds of store closures and plunging US sales since the death of its cofounder Fred DeLuca in 2015.
“Subway has been a sinking ship for a long time and I see this as a last-ditch effort,” Tim Powell, managing principal at consultancy Foodservice IP, said.
To kick off the menu reboot, Subway attempted to give away 1 million six-inch subs on July 13. But franchisees complained that the event was a letdown with hardly anyone showing up.
Both store owners on a private franchisee web forum and operators speaking to Insider complained about Subway’s new marketing campaign. Franchisees, who requested anonymity to speak freely but whose identity is known by Insider, said premium ingredients touted in ads don’t speak to the chain’s core value-seeking audience.
“For the longest time, we were a value chain,” a multi-unit West Coast operator told Insider. “So are we going to leave our value customers behind?”
The advertising “money is not being spent well,” another operator, based in the eastern part of the US, said.
In addition to Williams and Barkley, the new voice of Subway, the TV spots also feature Tom Brady, Stephen Curry, and Megan Rapinoe.
Subway’s menu now features 11 new ingredients such as deli-style sliced ham and turkey, smashed avocado, fresh mozzarella, a parmesan vinaigrette, and two new bread options.
The West Coast operator said the flavors in the new ingredients are not meeting the “craveability” factor needed to drive repeat visits to his store either.
“Zero customers have come back to say how tasty the sub was,” a California operator said on the private web forum.
Instead, he said, customers are asking: “Why do they slice it so thin?”
A Subway spokesperson told Insider that the Eat Fresh Refresh campaign is “a historic moment” for “the brand’s transformation journey that brings to life our new menu items.”
Powell of Foodservice IP said it is a “bit ludicrous” for Subway to market such basic menu changes as historic.
Early discounts causing lack of faith in revamped menu
Nayanika Barker, a veteran operator from California, applauded Subway for responding to franchisees who have been asking for years for a menu overhaul.
Other franchisees said that believing the menu refresh will improve sales is hard when Subway has turned to its old discounting playbook to promote it. Buy one, get one free coupons were mailed to households last week.
“I really want to see if our advertising dollars work and not with a coupon drop,” one Midwest operator said on the private forum.
Subway defended the two-pronged marketing strategy. “Well-known athletes and other profitable traffic-driving initiatives, like coupons, are one part of our efforts to drive profitable sales to restaurants.”
Another veteran operator said deep discounting over the years has hurt franchisees and contributed to a decline in profits.
Some franchisees told Insider that in the past month sandwich prices have also increased anywhere from 10 to 40 cents at their stores, a spike tied to rising labor and commodity costs. Additionally, the menu requires more labor from staff to make, as there’s a lot of prep involved versus the old menu.
“Value will never drive loyalty with anybody,” the operator told Insider.
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