Subway Wants Space In Supermarkets

The Lempert Report
January 27, 2021

A couple of weeks ago, Subway restaurants announced its intention to license its brand through Broad Street Licensing to “food and lifestyle spaces.”

The company didn’t give many specifics so we imagine the Subway brand might pop up as ready-made sandwiches, soups and maybe even Subway counters in supermarkets where freshly made sandwiches could be made. The announcement comes at an important time for the sandwich chain as many restaurants large and small are finding times during the pandemic a struggle at best.

In 2018 Subway closed more than 1,100 stores, in 2019 another 1,000 stores were closed and sales dropped $210 million and that’s after 5 years of declining sales from $11.5 billion in 2015 to $10.2 billion in 2019In 2020 Subway had 22,226 locations. With the pandemic, Subway decided to launch Subway Grocery at more than 250 locations – which included the ingredients, including the bread, that they use to make sandwiches – meats, cheeses, produce with curbside pickup and delivery.

Another problem that Subway has is that they have very few drive throughs, which during the pandemic has become a must have for most sandwich and burger chains in order to survive during the closing of indoor dining and customers reluctant to get out of their cars and fear to enter a restaurant for pick up. Take a look online and you’ll see that there are many Subway franchisees that have put their restaurants up for sale, in fact on Subway’s own website they list existing restaurants that are for sale across the nation. On, a quick search showed me more than 30 Subway franchises for sale here in California – from $80,000 to a high of $170,000.

What does all this have to do with Subway licensing their brand to supermarkets? Because, in my opinion, the Subway brand is not what it used to be. It is declining rapidly and may well be in trouble as today’s consumer, even pre-pandemic has changed. And while the chain is constantly testing and innovating new offerings, they just don’t seem to be sticking. In 1965, when Subway first opened (by the way - as Pete’s Super Submarines in Bridgeport Connecticut) the market had few competitors – Yes, there was McDonald’s, Geno’s, Jersey Mike’s Subs and a few others but Subway was different - touting their freshness and variety of customized offerings – truly the leader in personalization that every food business now is searching for. Back to the supermarket.

Unless Subway installs counters in supermarkets and make the sandwiches fresh in front of you – the idea won’t work. I do suppose there are some shoppers that will buy a pre-prepared pre-packaged Subway sub – but I don’t envision that there are a lot of them. And why does a supermarket need the Subway brand? I can understand supermarket putting in Starbucks or Wolfgang Puck’s Café as these brands enhance their own – but Subway? I don’t think so.