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Subway Records Strongest August Sales In 8 Years After Brand Refresh

Courtesy of ZeroHedge View original post here.

By Peter Adams of Restaurant Dive,

Summary

  • Subway recorded its highest August sales since 2013 on the tails of rolling out a brand refresh campaign, according to an announcement.

  • The "Eat Fresh Refresh" initiative launched on July 13 represents the largest changes to Subway's menu in company history with over 20 updates, as well as renewed commitments to digital technology. Total sales at U.S. restaurants were up 4% in August compared to 2019 figures, with Subway's top-performing quartile — a group representing over 5,000 store locations — seeing transactions up 33% versus two years ago.

  • The sandwich chain now expects to surpass its 2021 sales plan by more than $1 billion, a needed boost after standing as a laggard in the category. But Subway is still contending with headwinds, including recent tensions around its pick of brand ambassadors.

Subway is drawing a direct link between the "Eat Fresh Refresh" strategy and a sales boost in the summer period, including its highest weekly average unit volume transactions in eight years. The planned multiyear overhaul touches across the chain's business, with a menu makeover consisting of 11 new and improved ingredients, six new or returning sandwiches and four revamped signature sandwiches. The brand at the same time is remodeling stores and introducing an updated visual identity, along with putting larger priority on digital capabilities that have become must-haves for restaurants during the pandemic, with adjustments to its ordering platform and the debut of a direct delivery service.

Changes on the operational side of the business are complemented by what the company has billed as a "never-ending" marketing campaign. Subway tapped a roster of celebrity athletes such as Serena Williams, Tom Brady, Steph Curry and Megan Rapinoe to promote the retooling to consumers. A series of TV ads titled "It's Too Much for One Spokesperson" pokes fun at the scale of the campaign, with ambassadors stepping on each others' lines.

The effort also encompasses hundreds of new pieces of digital and social creative, in-store and print elements. Subway's marketing is overseen by Carrie Walsh, who was appointed CMO in 2019 after stints at Pizza Hut and PepsiCo.

Subway suggested that consumers have generally been receptive to the revamp. In a survey of 66,000 customers, 83% reported enjoying the menu updates, per the announcement.

"We are getting an extremely positive reaction from our guests regarding all that is new at Subway," said David Liseno, a multiunit franchisee in Central New York State, in a press statement.

Some research has uncovered pushback against Subway's spokespeople. An August survey by Piplsay revealed nearly half (45%) of U.S. consumers said Subway should drop Rapinoe, an outspoken member of the United States women's national soccer team. Rapinoe generated outcry over her decision to kneel during the Tokyo Olympics as a protest against racism.


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