Subway was a behemoth in the quick-service restaurant sector, but it had a string of blunders that thrust its glory days into oblivion. Store numbers were declining, public relations nightmare, and changing customer tastes set the sandwich chain tumbling. Yet, with visionary leadership, strategic innovation, and dedication to modernization, Subway staged an amazing comeback with a 9.2% jump in sales for 2022 and back-to-back years of record-breaking performance.
This article breaks down the pillars of Subway’s comeback, highlighting menu innovation, digital innovation, and strategic partnership that led the brand back from the precipice and set a new standard for success in a competitive marketplace.
Bouncing Back from a Rocky Patch
Subway faced significant challenges starting in the mid-2010s that tested its resilience. The death of co-founder Fred DeLuca in 2015 left a leadership gap, while the criminal issues surrounding former spokesperson Jared Fogle tarnished the brand’s reputation. Additionally, shifting consumer preferences toward fresher, trendier food and streamlined dining experiences put Subway at a disadvantage against competitors like Chipotle.
Leadership and Reputation Issues:
- Death of co-founder Fred DeLuca in 2015 created a leadership vacuum.
- Criminal issues with former spokesperson Jared Fogle caused public embarrassment.
Market and Operational Challenges:
- U.S. locations dropped 22%, from 27,103 to 21,147 by 2021.
- Rivals like Chipotle gained market share with fresher, trendier offerings.
- Consumer preferences shifted away from Subway’s build-your-own sandwich model.
Brand and Store Issues:
- Inconsistent store quality harmed brand perception.
- Outdated store designs appeared retro, failing to meet modern expectations.
These factors collectively weakened Subway’s market position, necessitating a comprehensive overhaul to address declining store numbers, outdated branding, and evolving consumer demands to regain its competitive edge.
A New Era of Leadership
The inflection point arrived in 2019 with the selection of John Chidsey as CEO, the very first outsider family executive to helm Subway. Leaning on his rich well of executive experience, Chidsey brought a practical, data-driven mentality to shake things up for the brand. His strategy was three-legged:
- Menu Innovation: Revitalizing the menu to focus on quality and variety, responding to criticism of skimpy offerings.
- Digital Transformation: Technology investments to be more convenient and in sync with today’s consumer demands.
- Physical Modernization: Restoration of restaurants to build a clean, welcoming environment.
These efforts were designed to restore customer confidence, simplify operations, and be a lasting success, and they set the stage for Subway’s phenomenal turnaround.
Revitalizing the Menu
Eat Fresh Refresh Campaign
Subway introduced the “Eat Fresh Refresh” campaign in July 2021, the catalyst for its culinary transformation. The campaign saw more than 20 menu enhancements, such as artisan breads, enhanced meats, and crisp vegetables. New items like the Turkey Cali Club blended strong flavors with quality ingredients, meeting the expectations of health-conscious as well as flavor-conscious customers. The makeover particularly responded to consumers’ views toward stale offerings, further accentuating Subway’s pledge to freshness.
Subway’s turnaround efforts yielded immediate and striking results. In August 2021, the company experienced its strongest monthly performance since 2013, driven by a significant increase in same-store sales.
Performance Milestone:
- August 2021 marked Subway’s best-performing month since 2013.
- Significant boost in same-store sales.
Brand Repositioning:
- Campaign successfully attracted customers back.
- Repositioned Subway as a brand focused on quality.
Foundation for Growth:
- Established a strong base for future innovation.
This success highlighted Subway’s ability to reconnect with consumers, restore brand confidence, and set the stage for ongoing improvements and market recovery.
The Subway Series Launch
In its quest for this success, Subway launched the “Subway Series” in July 2022, the most forceful menu launch in company history. The series included 12 signature sandwiches categorized into four collections:
- Cheesesteaks: Beefy, bold items for meat enthusiasts.
- Italianos: Traditional Italian-style sandwiches with big flavors.
- Chicken: Versatile choices that cater to a variety of tastes.
- Club: Gourmet versions of traditional favorites.
This streamlined approach made it possible for customers to order by number or name, avoiding complexity and stepping away from complex customization. Subway Series increased “craveability and quality perception,” and same-store sales climbed 7.4% across its eight-week rollout compared to Eat Fresh Refresh launch. The best-performing three quartiles of restaurants, approximately 15,000 stores, had sales increase more than 12%, September 2022 recording a year-over-year increase of 11% and top performers registering close to 18% growth.
Subway expanded its menu in July 2023 through the addition of the Deli Heroes portfolio, with fresh-cut meats. An $80 million investment provided every restaurant with a meat slicer free of charge to franchisees, highlighting the company’s focus on quality and support for franchisees.
Embracing Digital Transformation
Subway’s comeback went beyond its menu, with a strong digital strategy complementing changing consumer behavior. Digital sales have doubled since 2019, with double-digit growth worldwide. The main efforts are:
- Online Ordering Platforms: Efficient platforms for rapid, convenient ordering.
- Mobile Applications: Simple-to-use apps for customer experience improvement.
- Subway MVP Rewards: A loyalty rewards program.
Creative locations, including Subway Grab & Go and smart fridges in offices and convenience stores, stretched the brand. Global digital sales increased 11.1% in the first half of 2023, while North America was up 17.8%. An overhauled loyalty program coming in late 2023 is also designed to drive additional engagement and keep Subway poised to address changing needs for convenience while remaining committed to fresh, made-to-order food.
Strategic Marketing and Partnerships
Subway’s efforts at marketing have also played a key role in its turnaround, in the guise of a strategic collaboration with Netflix for “Happy Gilmore 2” on July 25, 2025. Riding on the brand’s appearance in the original 1996 film, the partnership entails:
- Happy Gilmore Meal: Starting July 10, 2025, at U.S. and Canadian restaurants, with upgrade feature for collectible cups with characters such as Happy Gilmore and Shooter McGavin.
- Happy Place at Subway: Digital interactive online destination at SubwayHappyPlace.com, featuring games, video content, and sweepstakes with prizes totaling more than $1 million, including a golf resort getaway.
- MVP Rewards Integration: Bonus entries for loyalty members, extending customer engagement.
The campaign taps into nostalgia and pop culture to revalidate Subway’s currency, resonating with fans by engaging them in rich, memorable experiences.
Reinventing the Physical Presence
Subway’s physical makeover has also been crucial. By December 2022, the company had refurbished almost 8,500 North American restaurants, with 2,600 done in a single year. In 2023, there are plans to upgrade another 3,600, opening up stores featuring the “Fresh Forward” concept with LED lighting, trendy furniture, and bright colors. Such modifications make for friendly ambiance, obliterating the old image of older stores.
The “Smart Growth” approach is concentrated in best-placed stores, multi-format stores, and franchisee support. Moving restaurants to high-volume locations and aligning with experienced multi-unit franchisees maximizes operating effectiveness. Remodeling 10,000 U.S. restaurants, Subway’s revitalized chain maintains its attractiveness to prospective investors, particularly in the wake of speculation surrounding a greater than $10-billion sale.
Financial Achievement and Continuing Challenges
Subway’s bottom line demonstrates its turnaround success. Across Q3 2022, same-store sales were up 8.4%, September being just shy of 11%. Top restaurants were up 13.8% and 18% for the quarter and month, respectively. Global same-store sales for the year were up 9.2% over 2021 and 29.1% over 2020, North America at 7.8%. The first half of 2023 recorded global sales at 9.8%, or 10 consecutive quarters of growth.
While Subway’s recent achievements are promising, persistent challenges linger, particularly from the pandemic’s impact on foot traffic in certain areas. The company’s “Smart Growth” initiative addresses these by strategically closing or relocating underperforming stores and fostering partnerships with seasoned franchisees.
Ongoing Challenges:
- Reduced traffic in select markets, notably Walmart hubs and urban centers.
- Lingering effects of the pandemic on customer visitation.
Smart Growth Strategy:
- Closes or relocates underperforming locations to optimize footprint.
- Promotes alliances with experienced franchisees for better operational support.
Global Expansion Commitments:
- Over 5,300 new restaurant commitments received worldwide.
- 15 master franchise agreements targeting 9,000 additional stores in Europe, the Middle East, Africa, and Asia Pacific.
These efforts underscore Subway’s proactive approach to market adaptation, aiming to bolster long-term sustainability through targeted pruning and robust international growth.
Critics observe that Subway’s expansion sometimes falls behind industry performance, with a 4% increase during August of 2021, lagging behind the industry’s 6.2%. Shutting 6,000 units shows persistence of optimization, and losing 1.5% foot traffic between 2019 and 2021 is in contrast to the 6% gain of the competition. Pre-scandal, such as the Jared Fogle and tuna authenticity scandals, have also been troublesome, though that Subway has met these head-on, e.g., through SubwayTunaFacts.com.
Building Stronger Franchisee Relationships
Subway undertook a significant restructuring of its franchisee model, shifting focus from single-unit owners to experienced multi-unit franchisees to enhance operational efficiency. This strategic pivot, alongside efforts to address franchisee concerns, reflects Subway’s commitment to fostering a more collaborative and profitable network.
Franchisee Model Redesign:
- Moved away from single-unit owners to prioritize multi-unit franchisees with experience.
- Example: Sale of 230 units to five multi-unit franchisees.
Franchisee Relations:
- In 2021, 250 franchisees signed a letter demanding operational changes, indicating prior tensions.
- Subway claims its franchisee network is now largely positive, emphasizing profitability and cooperation.
This overhaul demonstrates Subway’s efforts to streamline operations and strengthen franchisee relationships, addressing past grievances while building a foundation for sustained profitability and growth.
A Blueprint for Resilience
Subway’s reinvention from weakness to strength is a witness to strength of strategic reinvention. With menu innovation, technology innovations, strategic alliances, and unit makeover, the brand has not only recovered but achieved new standards for success. With stable finances, refreshed store base, and customer experience focus, Subway is speckled with successes in a competitive terrain. With its revitalization from its struggles and continued worldwide growth, Subway’s revitalization is an interesting study in how heritage brands can change, evolve, and be successful, demonstrating that a solid history can drive a dynamic future.
