Subway

Subway: The “Fresh” New Taste of Globalization

Rapid globalization is quickly transforming the world.  In 2003, Al-Jazeera English began broadcasting worldwide from its headquarters in Doha.  China is now the second largest economy in the world and 115 million friendships are accepted on Facebook every day.  At the end of 2010, Subway became the world’s largest fast food chain.

Founder Fred DeLuca opened the first subway in 1966, hoping to pay for an undergraduate psychology degree with the money he made.  It did that and more.
With the market increasingly saturated in the US, Subway set out on a long journey to establish stores overseas, opening its first foreign store in Bahrain in 1984. Subway now operates 33,749 restaurants worldwide, beating it’s closest competitor, McDonalds, by just over 1000 stores.  But what accounted for Subway’s meteoric rise?

The main factor was aggressive domestic expansion. There are nearly two subway restaurants for each McDonalds in the US, with 24,000 locations nationwide. McDonalds is still the more global brand, with more stores located abroad, particularly in Asia – an emerging market.  But this may change soon. Subway intends to have more stores overseas than in the US by 2020.  The company’s low cost franchise model will likely help. To set up a McDonalds franchise can cost 1 million dollars or more; alternatively, opening a Subway franchise costs less than half of that.  However, with being a number 1 multinational comes controversy.  Long characterized by anti-globalization activists as a symbol of cultural imperialism, McDonalds has been criticized for destroying local cuisines and promoting fast food diets around the world.  McDonalds has also been a heavy target of culturejamming: the memetic use of privately owned logos, symbols and slogans by activists to expose the darker side of corporate success – or to simply leave the viewer with a negative impression.

In 2003, McDonalds reported a financial loss for the first time in the chain’s history. A year later, documentary filmmaker Morgan Spurlock released Super Size Me, a film which linked eating at chain with poor health; in response to the ensuing public relations nightmare, McDonalds eliminated its supersize option.  Unlike McDonalds, Subway does not attract hostility from nutritionists. And despite Subway’s obvious American roots, sandwiches do not inspire images of an American hegemon like a hamburger with fries and a coke does. Not yet, at least. But if McDonalds struggles over the past decade are any indication, highly visible multinationals like Subway might face an uphill battle in protecting their brands against allegations of corporate irresponsibility and cultural imperialism, original writing by Mclyte Nyng.

Subway (restaurant)

Subway is an American fast food restaurant franchise that primarily sells submarine sandwiches (subs) and salads. It is owned and operated by Doctor’s Associates, Inc. (DAI). Subway is one of the fastest growing franchises in the world with 39,517 restaurants in 102 countries and territories as of 14 June 2013.   It is the largest single-brand restaurant chain globally and is the second largest restaurant operator globally after Yum! Brands (over 39,000 locations).

Subway’s main operations office is in Milford, Connecticut; five regional centers support Subway’s growing international operations. The regional offices for European franchises are located in Amsterdam, Netherlands; the Australia and New Zealand locations are supported from Brisbane, Australia; the Asian locations are supported from offices located in Beirut, Lebanon, and Singapore; and the Latin America support center is in Miami, Florida.

History – Early history

In 1965, Fred DeLuca borrowed $1,000 from friend Peter Buck to start “Pete’s Super Submarines” in Bridgeport, Connecticut, and in the following year they formed Doctor’s Associates Inc to oversee operations of the restaurants as the franchise expanded.   The holding company derives its name from Fred DeLuca’s goal to earn enough from the business to pay tuition for medical school, as well as Peter Buck’s having a doctorate in physics.   Doctor’s Associates is not affiliated with, nor endorsed by, any medical organization.   In 1968, the sandwich shop began using the name “Subway” for the first time.

The first Subway outside of North America opened in Bahrain, in December 1984.

In 2007, Subway began opening stores in Walmart supercenters.

Since 2007, Subway has consistently ranked in Entrepreneur magazine’s Top 500 Franchises list. It ranked #2 in 2012. It also ranked #2 on the “Fastest Growing Franchise” and “Global Franchise” lists.   In March 2011, Subway was named “the most loved fast food chain in the US” by Amplicate.com, based on their analysis of opinions expressed on social media websites.

At the end of 2010, Subway became the largest fast food chain worldwide, with 33,749 restaurants – 1,012 more than McDonald’s. In terms of revenue, McDonald’s still led Subway.

Products

Subway’s core product is the submarine sandwich (or “sub”). In addition to these, the chain also sells wraps, salad and baked goods (including cookies, doughnuts and muffins). While some menu items vary between countries and markets, Subway’s worldwide signature sub varieties include:

• Italian B.M.T.
• Roasted Chicken
• Subway Club
• Tuna
• Meatball Marinara
• Subway Melt
• Chicken Teriyaki
• Steak & Cheese

Subway’s best-selling sandwich, the B.M.T., contains pepperoni, salami and ham. The name originally stood for Brooklyn Manhattan Transit, but now stands for “Biggest, Meatiest, Tastiest.”

Subway also sells breakfast sandwiches, English muffins and flatbreads. In 2006, “personal pizzas” debuted in some US markets. These are made to order (like their subs) and heated for 85 seconds. Breakfast and pizza items are only available in some stores. In November 2009, Subway signed a deal to exclusively serve Seattle’s Best Coffee coffee as part of their breakfast menu in the US.

A 2009 Zagat survey named Subway the best provider of “Healthy Options” (in the “Mega Chain” category). Subway was also first in “Top Service” and “Most Popular” rankings. It placed second in “Top Overall”, behind Wendy’s.

Regional variations

Subway’s menu varies between countries, most significantly where there are religious requirements relating to the meats served.

In 2006, the first kosher Subway restaurant in the United States opened, in a suburb of Cleveland, Ohio. Subway spokesman Jared Fogle attended the opening. A press release stated, “With slight modifications, such as no pork-based products, and the use of soy-based cheese product, the menu is virtually identical to that of any other Subway restaurant.”   Since then, kosher Subways have opened in New York, Los Angeles, Kansas City, and Baltimore,   and plans were announced for Milwaukee and Boston.   Kosher stores on Wall Street and in Livingston, New Jersey have since closed.

In 1998, Subway ventured in to Pakistan opening its first branch in Karachi. After surviving early years of dormancy, Subway gradually emerged as one of the best sandwiches shops in the country. Currently, Subway has more than 30 outlets in 11 cities of Pakistan. These outlets are not only present in the major cities of Lahore, Sialkot, Rawalpindi, Islamabad,Bahawalpur, Gujranwala, Faisalabad, Jhelum, Multan and Hyderabad but two of the outlets are present at Bhera Northbound and Bhera Southbound stops of the Islamabad-Lahore M2 motorway (Pakistan) serving thousands of travellers along with KFC and local restaurants and shops. The subway restaurants do not serve Pork products and offer various local varieties such as Chicken Tikka and Chicken BBQ.

Subway opened its first restaurant in India in 2001 in New Delhi. Subway restaurants in India do not serve beef and porkproducts, and sell an extended vegetarian range. There are 324 Subway restaurants in 65 cities of India as of January 2013.   On September 4, 2012, Subway opened its first all-vegetarian outlet on the campus of Lovely Professional University (LPU) in Jalandhar, Punjab.

Most Subway restaurants in Muslim countries offer a halal menu. At least two Subway restaurants in the United States, three in Canada and over one hundred in the United Kingdom do the same.

Nutritional content

In 2011, Subway introduced gluten-free bread and brownies to some locations in Texas.   It also cut the salt content of its sandwiches by 15 percent.

In the UK and Ireland, Subway has reduced salt content across its entire range by 33% and has committed to further reductions, in line with government targets.   Subway’s range of “Low Fat” subs is endorsed by the charity Heart Research UK.

Key: Green = Countries with Subway restaurants as of 2012.

Advertising

Subway uses the advertising slogan “Eat Fresh”, and focuses on how their sandwiches are made from freshly baked bread and fresh ingredients, in front of customers to their exact specifications, by employees whom Subway calls “Subway Sandwich Artists”.

In November 2007, Subway’s US commercials featured the cartoon character Peter Griffin (from Family Guy) promoting its new Subway Feast sandwich.   Subway has also used “instant win” games, based on the game Scrabble.

Subway has run a product placement campaign in the US TV series Chuck since its first season. As ratings dwindled in the second season, a campaign to “save Chuck” was launched for fans, encouraging them to purchase a footlong sub from Subway on April 27, 2009, the date of the season finale. Tony Pace, Subway’s marketing officer, called it the best product placement the restaurant chain has done “in several years.”

$5 footlongs – For more details on this topic, see Subway $5 footlong promotion.

In 2008, Subway began to offer all foot-long submarine sandwiches (excluding premium and double-meat varieties) for five dollars, in the continental United States and Canada, as a “limited time only” promotion. “Five Dollar Footlongs” quickly became the company’s most successful promotion ever.   Upon the initial promotion’s completion, customer response prompted Subway to create a permanent “$5 Footlong Everyday Value Menu” that offered some footlong sandwiches for $5. As of 2011, there has been a monthly rotating $5 footlong.   Which subs are permanently priced at $5 varies by market.

In October 2011, a similar promotion was launched in the United Kingdom. Customers can buy one of nine subs and any drink for £3 (for a six-inch sub) or £5 (for a footlong).

Sub Club

In early June 2005, Subway announced its customer reward program would be phased out due to counterfeiting. The “Sub Club” program was discontinued in the US and Canada by Doctor’s Associates.

All stores in the United Kingdom and Ireland participate in the Subcard system, offering customers points with each purchase at a Subway store, which are redeemable for subs and snacks. Unlike in the US system, these cards cannot be used to store cash. The program will be rolled out in Germany and other parts of the EU from 2012.

Participating Subway restaurants in the U.S. and Canada offer a “Subway Card” to customers, which functions as a stored-value cash card. In some states and provinces, the card also functions as a “Subway Rewards Card”, allowing customers to earn points for free food and sandwiches. Unlike in the “Sub Club” program, no other purchase is needed when redeeming points, and registered cards can be replaced if lost or stolen.   Subway runs periodic promotions in which it gives away free subs to customers who preload a Subway Card with certain dollar amounts, usually listed at mysubwaycard.com.