Subway calls 'emergency' meeting with franchisees as sales plummet
nypost.com
nypost.com
Is this another leveraged buyout? When are they going to make that illegal? You can't even do that in a game of 18xx, and lord knows those are cut throat enough.
Never. Doing a company buyout that is 'leveraged' just means it uses at least $1 in debt. Banning that is impractical and probably deeply harmful to the economy.
Furthermore, the 'losers' in an LBO that crashed are first the equity holders, who did the deal, and then maybe debtholders, who were well informed about the risks.
If Company X is an LBO target, gets bought out, does poorly, goes bankrupt, and gets sold a for a reduced value it may continue to operate with little change in the day-to-day.
Everything appears to be done as cheaply as possible with no regard to what the customer wants.
Funny how all the store owners have been complaining but only now that the corporate office is suffering is there an “emergency“ .
I got my food elsewhere.
https://newsroom.subway.com/2023-02-02-Subway-Announces-Seco...
[edit] to put some numbers on it: just the other day I saw one attached to a gas station where just about any foot long was $13+. Six-inchers? $10!!!
I just today happened to go to a fairly fancy sandwich place. Their sandwiches were $13-15, at least as much eating as a foot long from subway, and came with two sides. Like, it was enough food for two people, really, and good. I guarantee their ingredient costs are 3x Subway’s.
Their prices are insanely out of wack with reality. A $5 foot long may not be in the cards anymore, given actual inflation on their costs, but they can’t charge entire-meal-with-very-good sandwich prices for a much shittier sandwich all on its own, and not expect a drop in sales.
Yep. Basically nothing on the menu for under $13 for a 12-inch, and they've made it clear they're not interested in selling 6-inch sandwiches. I was thinking the other day that this is the danger of setting numerical targets. Obviously an MBA in the executive suite thinks it's important to maximize the per customer revenue per visit. Easiest way to do that is to run off every customer that doesn't hit that numerical target.
But yes, charging 12 bucks for something that was 5 bucks a few years ago is the reason people are not visiting. And from the article franchise owners are complaining about promo prices at 7 dollars. Sounds like a mix of really bad business owners all around.
https://www.distractify.com/p/what-happened-to-five-dollar-f...
They are especially bad. There was a fun fake Korean "Sandwich drama" bit.
https://www.youtube.com/watch?v=jDdYFhzVCDM
As a former teenager who worked for Subway... seems like it's fallen quite a bit from the early 90s.
John Oliver is rather unpopular with a lot of the HN crowd, so I tend not to link to his videos.
Prominently display preconfigured versions of your existing items, all of them with 'extra cheese' buried in the description. They charge $1.50 for two slices of processed cheese, quite possibly one of the worst value tack-ons in all of fast food.
The stuff you used to order is now shoved all the way down to the other side of the counter from where you order. You'll never order from it unless you already know about it.
Subway is the worst possible sandwich option. I'd rather go to the gas station and buy a protein bar than eat at Subway. I say this as someone that eats at Jersey Mike's and local sandwich shops twice a week.
Here I'm getting a sheet of coupons in the mail monthly, good for a month. The sheet usually includes a couple for a cheap price on most 6" sandwiches, a couple for a cheap price on most footlong sandwiches, a couple for a cheap price on two footlong sandwiches, a couple for a cheap price on 3 footlong sandwiches, plus deals on various sandwich and drink combos, and a couple for free chips or cookies with any purchase.
They will make a sandwich with wet veggies and condiments on the side if you ask, so I've used the 2 and 3 sandwich coupons to have one sandwich made normally for eating then, and the other one or two made with just bread, cheese, meat, onions, and green peppers with tomatoes and pickles in some cups they have for that, and with mustard, mayo, and vinegar in packets. Those sandwiches keep quite well in the fridge for eating the next day or the day after that.
I think they got really huge during the late 90's early aughts when fitness and eating well was a big thing. I think with better alternatives, the rising cost of food because of inflation, people just don't see the value of their offerings any more.
I'm sorry for the disruption to the people displaced but not every single restaurant is entitled to revenue.
As much as I am a fan of small business, I see this attitude from a lot of small business owners as their businesses are closing. One near me on Facebook literally said this in one of their final posts (and I get it, emotions are high):
> It is sad to see that our dream with so much potential collapsed because the community wasn't willing to support it.
Like, excuse me? We're the reason your dream died, because we didn't financially support it? I missed the part where that was our responsibility.
Way back in 2006, Subway started baking their sandwich bread with those reusable silicone trays, and it imparted a bad flavor. The potato bread they used for kids sandwiches didn't use the weird trays and actually tasted like freshly baked bread still. A few years later they removed potato bread from their offerings.
Subway's quality has been on the decline for a long time. This latest crisis is simply the consequence of people finally changing their habits when forced to by price.
It's just gross, go to any Subway, literally anywhere, and the one thing they seem to have in common is that their bathrooms are worse than any truck stop.
Bread is more narrow too in recent years. They've been raising prices and shrinkflating everything they can. Nice to know I wasn't the only consumer who noticed.
As a consumer, I know they didn't "wrong" me, but it sort of feels like they were saying, "We're so much more clever than you, we'll raise your prices and give you less and you won't notice!"
But everyone noticed. And it feels good to see their bottom line suffering. Hope this is the comeuppance they needed to get their act together.
I used to love Subway, hell I ever worked at a Subway when I was in high school. Subway has been on a steady decline the last 5-7 years.
Just one small story... a few months back I picked up some sandwiches for some contractors that were at my house. 3 subs, nothing fancy. And the total was $47 (without drinks, cookies, or a tip). For suburban Texas... this is absurd. The staff member told me, "Use the website or the app next time, there are better deals there..."
So the next time I went to use the website, and I couldn't... their website just dies and hangs on this loading screen if you have an ad-blocker running. Junky. No way I'm disabling my ad-blocker just to order a sandwich.
But... I do have to say, Thundercloud Subs are way better anyway, and most are $5 cheaper than Subway at this point. So Subway being as awful as it is... this pushed me to find something better. Ha. https://thundercloud.com/main-menu/
I haven’t eaten at a Subway in a good ten years, and one of the reasons was because they were often dirty-looking (or just outright dirty). So from my experience, it is not just “recent years”. As for the rest, meh, they were a serviceable option, but never all that great. Meaning that for me at least, it didn’t take much (menu change, higher prices) to start looking for alternatives.
I think there's been a big shift away from the franchise owners being the day-to-day managers, and they just hire someone and near-minimum wage to be the manager now. Gut feeling on it anyway. Doesn't feel like anyone who works there cares or takes any personal pride in the cleanliness of the bathrooms. (Ha, is this what getting old feels like?)
An interesting thing that I've noticed in the last several years in my area is that most of the franchise shops around here are owned by a handful of investment companies rather than actual people.
You got a lot more working crappy jobs back then vs working crappy jobs now.
One perk of working at Subway was that my boss didn’t mind if we made sandwiches for ourselves.
My go-to was roast beef and tuna.
And I could trade a Subway sandwich for a burrito at the place next door, or even a video at the video rental place. Lots of little perks I remember.
Their bread isn't even technically bread.
They also, somehow, against all odds, made the five dollar footlong, their most popular offering, NOT five dollars.
The stores in their network are usually gross and uninviting.
Meanwhile, Jimmy John's, which is only 20 years younger, has fresh (good!) bread that's baked on premise, decent quality meats and cheeses, and stores that are clean, welcome and well decorated.
Subway is the personification of "I've done nothing and am out of ideas!"
(Subway is owned by Roark who also owns Dunkin and Arby's, brands that are THRIVING.)
Tech employees of course might be just going somewhere nicer. Why that would suddenly happen and as a bigger % of sales than tech employees represent is unclear.
For other people who can afford a $7 sandwich and can’t afford a $12 sandwich, this is a big signal.
* The group/indicator really is "people paying for absolutely cheap, easily available cooked food" instead of "relatively" - the demographic in question has experienced wages not increasing with inflation.
* A Tiktok comment she saw and pointed out to me said this: "I'm not paying $12 for a sandwich that used to be $5."
Perhaps their "5 dollar footlong ad" was simply too effective.
There is a psychological training aspect, but it is unclear to what degree it correlates with the underlying financial reality. Are they both offended and unable to buy or just offended? In a non-anonymous social medium it is safer to communicate outrage than desperate poverty.
It's like everything else, profits have been prioritized over everything else. There's simply no reason they have to be in trouble other than greed - overexpansion, advertising a ton but not enforcing quality (which is probably cheaper, but not useful)
I don't care who some famous sports players pretend to like, I want something I can depend on. Subway is the McDonald's of sub sandwiches. They've done so many menu changes and got rid of one of my favorite things, and their reshuffling and rebranding drives me nuts.
The classic private equity playbook is about to kill Subway.
(Not that it was doing great before, but take a distressed company and saddle it with a ton of debt payments on top of its existing problems just... never seemed like a winning strategy to me.
A lot of people say "it's too expensive for what you get" which feels true, but I experience sticker shock with all fast food these days.
My last few meals on GrubHub (I live in SF):
- 2x Double Cheeseburgers from Calibur: $39.90
- 2x Super Burrito from local Mexican restaurant: $41.24
- General's Chicken, Mongolian Beef, Rice, and Cream Cheese Wontons from local Chinese restaurant: $60.34
- Chicken Cashew Nut, Pananag Curry, Rice from local Thai: $48.14
So like... it's all extreme these days? $40 for two cheeseburgers makes Subway seem tame in comparison.
It could very well be the quality of their ingredients. They did revise their menu/ingredients in 2021, https://newsroom.subway.com/2021-07-06-Subway-Debuts-Largest... but I didn't hear any big backlash regarding that so I assumed it was reasonably well received. I'm not especially convinced by this argument because I would expect cheaper ingredients to translate to cheaper costs and to allow them to capitalize on a slightly different market.
I know Subway has a long history of encouraging too high density of franchises, no source though. Is this just a continuation of that problem? Maybe higher density makes them perform even worse in the new, delivery-first market? Or maybe it's a failure to simply adapt to the delivery-first market? I know I don't order that many sandwiches because I default to thinking, "I can make a sandwich at home pretty easily" where I don't feel similarly about hot/cooked food delivery.
It could also just be the media blowing Subway out of proportion? A lot of the market is starting to show cracks and there were a few warning signs of recession recently. McDonalds reported weakening sales recently, too (https://www.reuters.com/business/retail-consumer/mcdonalds-s...) Is the problem not related to Subway at all? Are consumers just tightening their purse strings?
That's the delivery price, right? Pick-up price is $24 https://order.toasttab.com/online/calibursf
Just another company that will be bankrupt shortly after selling to private equity.
Fast food chains raised prices dramatically during Covid and are now dealing with declining sales as the economy cools. They need to actually push their suppliers to cut costs and try to get back to baseline.
This is a tough pill an independent company could swallow. But the new private equity owners will never do that.
> Allegations of Fogle having inappropriate relations with minors began in 2007
> Following Fogle's arrest, the FBI also subpoenaed a series of text messages made in 2008 between Fogle and Subway franchisee Cindy Mills, with whom he was having a sexual relationship at the time. In these messages, Fogle talked about sexually abusing children ranging in age from 9 to 16, told her to sell herself for sex on Craigslist, and asked her to arrange for him to have sex with her 16-year-old cousin. Mills's lawyer said that she had alerted Subway's corporate management about the text messages, but that they had responded that because Fogle was not a Subway employee, there was no violation. Subway representatives said they had no record of Mills's allegations.
> On October 24, 2016, Kathleen McLaughlin's lawyers filed suit against Subway in Indiana. The suit alleges that Subway violated McLaughlin's privacy and property rights, and caused personal injury to McLaughlin by covering up at least three instances of Fogle's illegal behavior that were reported to senior management, including the allegation that Subway's senior vice president of marketing hushed up a 2004 incident in which Fogle propositioned a young girl at a promotional event at a Subway franchise in Las Vegas.
It all sounds a bit like Jimmy Saville, where "people knew" but were not concerned about the victims, because he was making them money.
[1] - https://www.prevention.com/food-nutrition/healthy-eating/a20...
If you refuse to share any ingredients with yoga mats, you can't use water.
Bread is made of yeast, flour, water and salt. Anything else isn’t bread. And this isn’t pining for some mythical past: there are still countries where you can buy real bread on practically every street, and it’s better.
People know Subway bread doesn’t taste like food, even if they might have misidentified the specific ingredient that’s at fault.
Have you looked at the ingredient list for fruits?
This is simply wrong and excludes quite a lot of traditional and uncontroversial breads. Your ingredient list (you don't technically need the salt, by the way) describes the minimalist -- and best, in my opinion -- yeasted bread. I consider unleavened and alternatively leavened breads to be breads as well, but that's neither here nor there.
But potato bread is also bread. Bread doesn't stop being bread because you've added seeds, or egg, etc.
I think Subway's bread is certainly bread. Really terrible bread, but bread nonetheless.
Subway's "obscure ingredients" aren't uniquely terrible. They're common ingredients that exist in a whole lot of your diet unless you're taking great pains to avoid them. I would prefer they weren't there at all, but that they are is neither surprising nor particularly outrageous. They're part of industrial food production, and fast food is absolutely industrial food production.
> there are still countries where you can buy real bread on practically every street, and it’s better.
You can do this in most of the US. Maybe not on every street, but it's readily available.
It's bread.
The fact that they freeze and ship the dough probably has something to do with the quality...
Similarly with a sibling comment about how we use condom lubricant in cooking oils, maybe we just shouldn't?
And metabolic pathways are very complicated, you can't really judge whether something is a problem by looking at intermediates that exist in tiny quantities.
[1] https://efsa.onlinelibrary.wiley.com/doi/full/10.2903/j.efsa...