Subway Strives To Keep Strategy Fresh
From Domino’s sandwich launch and in-your-face ad campaign to Quiznos attacking at every price point, Subway has had more than its share of competition this year. However, the chain continues to see gains on top of the double-digit growth it experienced last year. Sales may be coming in $5 at a time, but that’s the way Subway wants it. The $5 footlong has given the chain a weapon to battle the recession—one that competitors continue to search for an answer to combat. CEO of the Subway Franchisee Advertising Fund Trust Jeff Moody sat down with Brandweek to discuss the competition, the economy and the chain’s plans for future growth.
Brandweek: Business is strong. What’s your secret?
Jeff Moody: Subway continues to do well despite the economy being down and the fast-food business being down as well. The secret is value, health and a great product. The $5 footlong product is doing very well for us. Since we launched it in March of 2008, it has become a multibillion dollar brand in and of itself. Now the challenge is how do you keep it relevant. The answer is with new advertising, new things like the $5 buffalo footlong sandwich. There’s a constant stream of new ads [from MMB, Boston]. We tend to rotate in new programs every couple of months. Pretty much every month there will be something new coming from us on television. Buffalo chicken just started last week. We did the Tuscan chicken sandwich earlier in the year. We did a Scrabble promotion recently that lasted about seven weeks. We have health messages that continue on an ongoing basis. We use Jared in different ways. We just launched a new partnership with NBC. We’ve branded Sunday night as being Subway night in addition to being football night. There is POP in the stores that promotes NBC and Subway. We’ll have ads during other major sporting events including the President’s Cup, figure skating and hockey.
BW: Can you ever abandon the $5 footlong now?
JM: There are a lot of things we can do. It depends on the economy and what happens with commodity costs and so forth. We can definitely do $6 and $7 versions keeping a baseline of $5 offerings. If things get too expensive, you ultimately have to come off. One of things I look at is the dollar menu. It’s changed, but it’s still there. When it first came out over a decade ago, people said this will never last. They found a way to keep things fresh. We will look to keep things fresh at $5, but there won’t be the same items on the menu forever, obviously.
