Subway closeup of the door as plenty of as 10% that its restaurants in the previous year together the coronavirus increased the decrease of the country’s biggest restaurant chain by unit count, according to a range of sources.
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Those resources told Restaurant Business that an estimated 2,200 come 2,400 the the chain’s devices closed last year.
Actual numbers were not available. Asked for comment, Subway would not provide the variety of restaurants in the chain and listed that the number of permanent closures last year to be “lower than your estimate.”
“Subway does no disclose this information, yet we have the right to tell you that the number you noted is not accurate,” the company said in one emailed statement. “The number of permanent closures in 2020 is reduced than her estimate, together there space temporary closures due to COVID.”
Subway’s unit-count decrease has to be well documented. The Milford, Conn.-based sandwich huge has been shrinking because that years and closed more than 1,000 locations in both 2018 and also 2019. In the 5 years going into 2020, the chain shrunk through 12% together its franchisees closed much more than 3,000 units overall.
Subway entered 2020 v 23,801 locations. If the company closed 2,400 locations it would have actually 21,401 locations right now, wiping out well end a decade’s precious of unit count growth.
The pandemic has actually been specifically bad because that the company’s places in malls and also in urban locations where sector sales have been weakest. A few dozen Subway places closed in new York City last year, because that instance.
Subway no operate any type of of its very own locations, leaving that to thousands of franchisees, many of whom operate just a pair of units. When a unit closes, in other words, one investor loses his or her investment in the restaurant.
Subway has historically deployed one aggressive development strategy, focused on selling much more sandwiches simply by peppering the civilization with that restaurants. The agency grew into the largest restaurant chain in the world by variety of locations and at its height had much more than 27,000 locations.
With so numerous locations, however, its operators generate a little amount the sales every restaurant. Its typical unit volumes prior to the pandemic were about 60% of those of its nearest competitor, while chain such as Jersey Mike’s and Potbelly perform twice the lot of sales per place as Subway.
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Sandwich chains’ pre-pandemic unit volumes
Subway has struggled because that years to change away indigenous a low-cost strategy that used during the recession and find an advertising campaign in the results of the arrest the longtime spokesman Jared Fogle back in 2015.
As the chain’s same-store sales stagnated and also costs raised for labor and also food and technology, operators started closing your doors.
The closures in 2020 suggest that the years of declines in unit count might not be top to higher sales at surrounding units—which would keep other areas afloat. In other words, the company could be facing much more closures in the coming years.
“It would seem choose they haven’t fight bottom yet,” john Gordon, a restaurant consultant in mountain Diego, said in an interview. “Until we watch some corporate actions that space either a very solid marketing that drives memories and utility with the customer, yet while still structure a financially rewarding transaction through the customer, and/or providing some reasonable financial relief for franchisees, climate there is no underpinning for stores continuing to close.”
Subway has taken numerous steps in a bid to get earlier into customers’ an excellent graces. It has actually overhauled its executive team under john Chidsey, named CEO a year ago. It has actually been advertise price competition this year and also used price transaction to acquire customers ~ above its smartphone app.
This month, the firm revealed a new line of protein bowls designed to target client who room cutting carbs—one factor why some believe the chain has actually struggled to gain back the wellness halo it had during the Jared years.