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For the first time in two decades, the familiar green and yellow of Subway
storefronts have dipped below the 20,000 mark in the United States. According to
recent franchise disclosure documents, the sandwich giant concluded 2024 with
19,502 locations nationwide, having shuttered a significant 631 restaurants within
that single year. This contraction marks the eighth consecutive year of net
closures for the chain within its home market.
While this news might raise eyebrows, it's crucial to contextualize Subway's current
position. Despite the consistent reduction in its U.S. presence, the company still
proudly holds the title of the largest restaurant chain in America. This speaks to
the sheer scale Subway achieved during its period of rapid expansion.
Zooming out to a global perspective, the narrative shifts. Subway's international
operations are experiencing a period of growth, marking the second consecutive
year of expansion. The chain now boasts a total of 37,000 locations worldwide,
highlighting the varying dynamics at play in different markets.
In a statement provided to CNN, Subway acknowledged the U.S. closures and
emphasized its ongoing strategic review of its domestic footprint. The company
articulated a "strategic, data-driven approach" aimed at ensuring its restaurants
are optimally positioned, boast the right image and format, and are operated by
suitable franchisees. This suggests a deliberate effort to refine and optimize their
U.S. presence rather than a simple retreat.
Subway further elaborated on this approach, stating that it is actively involved in
"opening new restaurants as well as relocating or closing locations as needed, to
ensure a consistent, high-quality and convenient guest experience." This indicates
a dynamic strategy involving both pruning underperforming locations and
investing in new or better-positioned ones.
The news of these closures arrives on the heels of Subway's decision to discontinue
its $6.99 six-inch Meal Deal back in November 2024. This promotion, which
included any six-inch sub with a small drink and chips or two cookies, was
reportedly pulled from stores on November 27, a mere few weeks after its
introduction on National Sandwich Day (November 3).
Internal communications from Subway at the time suggested the Meal Deal, while
meeting its daily redemption targets, was not delivering the anticipated overall
results in terms of traffic, sales, and ultimately, restaurant-level profitability. This
highlights the delicate balance between attracting customers with value offerings
and ensuring the financial viability of individual franchises.
Subway defended its approach to value, stating it is "thoughtful and strategic,
leveraging data to help balance consumer needs while protecting franchise
profits." The company also emphasized its commitment to continuously testing
new value platforms aimed at driving profitable traffic and encouraging repeat
visits.
It's worth noting that Subway isn't alone in navigating a challenging retail
landscape. Several JCPenney stores across seven states are also slated for closure
by the end of May. However, JCPenney characterized these closures as "isolated"
and stated there are "not plans to significantly reduce our store count," suggesting
potentially different underlying reasons compared to Subway's more prolonged
period of contraction. Initial searches indicate that JCPenney's closures are linked
to expiring lease agreements and broader shifts in the retail industry, including
increased competition from online retailers.
In an effort to revitalize its brand and attract customers, Subway has been actively
implementing several key strategies. These include:
Menu Customization: Enhancing the ability for customers to personalize their
orders.
Digital Focus: Doubling down on promoting orders through its mobile app.
Freshly Sliced Meats: A significant operational shift from pre-sliced cold cuts,
aimed at improving perceived quality.
Value Initiatives: Recognizing the importance of affordability, Subway recently
announced the return of the $6.99 footlong deal for the entire month of May,
making it a digital exclusive to further encourage app usage and build customer
loyalty. This mirrors a broader trend among fast-food chains leveraging digital
platforms for promotional offers.
while Subway's shrinking U.S. footprint is a notable trend, it appears to be part of a
calculated strategy to optimize its domestic operations amidst evolving consumer
preferences and competitive pressures. The company's simultaneous international
growth and its focus on new menu options, digital engagement, and value
initiatives suggest a multi-faceted approach to ensure its long-term sustainability
and relevance in the global quick-service restaurant market. The contrast with
JCPenney's more isolated closures highlights the nuanced challenges faced by
different players within the broader retail sector.
