We all remember Jared Fogle as the “Subway Guy,” when the world awed at the size of his pants that he used to show off in the commercials and how he tried to “change people’s lives” by telling them to eat a Subway sandwich. His image that he had built up for more than 15 years and the brand he was associated with all came tumbling down in a matter of months when Fogle was charged with child pornography and paying for sex with minors.
However, it isn’t just Jared Fogle that Subway needs to be concerned with.
Subway is in deep trouble. Yes, Jared Fogle’s incident will have an effect on sales and store foot traffic, but it’s the competition that is currently burying Subway deeper into its hell right now. We’ve all seen the claims that Subway is the healthiest option in terms of fast food chains, but after a chemical was discovered in its bread, their ‘quality ingredients’ have come under fire.
How bad is the damage?
They’re still pulling in billions of dollars in sales still, but a 3.3 percent drop is a little steep for such a large chain, according to Business Insider. There are two major issues that are currently plaguing Subway in addition to Jared Fogle’s scandal. Subway is expanding way to fast. The restaurant chain opened up 778 new stores last year alone. That type of expansion may have looked good on paper, but executed, it saturated the market and lead to a decline in sales. Another issues is that they have not changed their menu too much. Yes, they have added guacamole (which people are hesitant to try) as well as menu deals, but nothing that will draw new customers in and keep them there.
The business model needs to change for Subway and they have to do some serious damage control now to protect their restaurants and keep them from failing completely. Where is the competition? The fresh that consumers want is now being taken over by both Chipotle and Panera Bread which are proving to be Subway’s biggest competitors now. If Subway wants to salvage some of their restaurants, a better approach to “fresh” is in order.