Subway's Sales Woes Reportedly Lead To Deal For Digital Customers

It's no secret that fast food restaurants are pushing digital sales. But Subway hasn't always excelled in that area. Amidst financial struggles, the chain may be looking to attract digital customers with an offer. Subway has reported growth in recent years — a win after years of lagging sales. But it has also had a long streak of closures, losing 7,000 locations since 2015. Now, after Roark Capital recently acquired Subway, the chain faces more uncertainty. Sources told Restaurant Business that sales for 2024 were more tumultuous. Unfortunately for the company, costly improvements like $6000 meat slicers have had limited success.

Now, the chain is apparently attempting to drive sales through improved digital offers. Franchisees told Restaurant Business that, on Thursday, the Subway announced the launch of a $6.99 footlong digital deal via a webinar for operators. The chain denied reports that it was an "emergency" meeting, per FOX Business. If the franchisees' claims are accurate, the deal will start August 26 and last two weeks. It's not as cheap as the chain's famous $5 footlongs of yore, but it could also be worse. These days, some footlong subs go for over $14.

Subway isn't unique in its attempt to lure customers with steep digital discounts. Inflation hit the fast food industry hard, and many customers no longer see fast food as an affordable option. Restaurants view digital deals as a direct way to target loyal customers and keep them coming back. Online orders have low overhead costs, too, and research suggests that digital customers are prone to spending more.

In the past, Subway wasn't so quick to embrace digital sales. In 2022, market research company PYMNTS reported that the company's digital options lagged far behind those of its fast-food competitors. Why? Perhaps the app hasn't been very good. In Tasting Table's ranking of 15 fast food loyalty apps, Subway's app came in at a dismal 14. A reviewer cited its frequent glitches and "awful" interface.

Subway has another issue with digital sales: Some franchisees dislike them. Historically, the chain let franchisees opt out of coupons. In 2022, one manager explained her reasoning to WHO13 Des Moines. "If we keep giving stuff away we can't keep the business open, we're not a corporate, we are individually owned," she said. However, Subway started forcing franchisees to accept coupons late last year. A representative told Restaurant Business, "Even after the offer period has ended, these promotions provide ongoing momentum ... and encourage repeat Subway guests." However, it remains to be seen whether franchisees will agree — a risky move for a company already plagued by discontent among franchise operators.