After a time when it seemed unbeatable in fast food, America’s biggest sandwich chain—Subway—has taken a gigantic hit. Behind the scenes, and with little pomp, the company closed 631 locations in the
United States in the past year. For the first time in 20 years, its US presence fell below 20,000 stores. That is a dizzying drop from its 2015 high of approximately 27,000 stores.
Why is this happening? Is it merely a matter of aging decor and declining sales of footlongs, or is something below the surface rumbling behind the sneeze guard? Let’s unwrap the sandwich and get to the bottom of things.
The Long Slow Decline
Subway’s recent store closures are not a one-year trend. It’s the eighth year in a row that the chain declined in its home country. Although it still has the most franchises of any fast food chain in the United States, it’s been gradually pulling out of shopping malls, gas stations, and street corners.
The ubiquitous aroma of fresh bread? Fading. Industry observers point to increased competition, changing consumer preferences, and declining per-store sales as the main drivers.
And Subway’s franchise structure has been under pressure for decades. In a volume business, fewer units equal fewer dollars of influence in a more competitive marketplace.
Franchise Fatigue and Financial Stress
The franchise model on which Subway has built its extraordinary success is fueled its runaway growth but has fast become a liability. Franchisees have been forced to contend with thin profit margins, increased expenses, and old store designs.
Some have even filed for Chapter 11 bankruptcy. To add insult to injury, the most recent cyber attack on one of its biggest bank partners forced the abrupt closure of 23 restaurants across two states, leaving almost 200 employees in the dark.
These aren’t statistics—these are actual livelihoods, abruptly and unceremoniously terminated. Subway claims it’s adjusting, but to franchisees, the pressure cooker has already reached a rolling boil.
A Billion-Dollar Buyout
In 2023, heirs of Subway’s founding fathers agreed to sell the company to Roark Capital for $9.6 billion. The private equity company that owns Dunkin’ and Arby’s promised a turnaround. But up to now, U.S. sales have not boomed.
While domestic results are questionable, Subway’s global presence is the opposite. With more than 37,000 restaurants worldwide, the brand is still a contender overseas.
Emerging Asian and Middle Eastern markets are funding worldwide totals, albeit as quietly as stores vanish off American strip malls. For now, real growth seems to remain overseas.
Smart Growth or Smart Retreat?
Subway has dubbed its new strategy “Smart Growth”—a qualitative rather than quantitative proposition. The company’s adamant it is capitalizing on store locations, closing under-performing stores, and opening others in more prime locations.
It’s a strategy to increase average unit sales as opposed to just trying to chase numbers. Sounds good and dandy in theory. But closing hundreds of restaurants while competitors such as Jersey Mike’s and Firehouse Subs continue to add new locations?
That’s a nasty PR sandwich to swallow. Subway maintains it’s “streamlining” for enhanced customer experience. Critics label it damage control disguised as corporate doublespeak.
Fresh Forward 2.0 Enters
Subway is also redesigning its in-store experience with a new fresh face, Fresh Forward 2.0. Imagine: brighter lighting, trendier wall graphics, additional digital ordering kiosks, and cleaner-looking food stations.
The goal? To make the brand look and feel new—and maybe even rekindle consumer passion. Because after all, younger consumers expect more than just a cold-cut salad blend. But refurbishing thousands of stores is expensive, particularly when so many are just scraping by.
Nevertheless, the executives think making over the stores is the solution to putting an end to years of red ink. It all hinges on how quickly (and inexpensively) they can distribute it.
Pepsi, Not Coke? That’s Bold
In an unexpected twist, Subway announced a 2024 transition from Coca-Cola beverages to PepsiCo, breaking a decades-long partnership. The web wasn’t so pleased about that either—most of its replies fell flat of bubbly.
Some hot-tempered regulars threatened to defect (or skip the soda). Subway spun the action, however, as one in a strategy to streamline logistics and reduce costs.
The soda-for-pop swap is meant to allow franchises to save money. Whether it changes foot traffic remains to be seen. One thing’s certain: it generated a heck of a lot more media commotion than the décor update.
Losing the NFL & Gaining Nachos
Subway also lost a big deal when Jersey Mike’s joined the NFL as its official sandwich sponsor. That’s a big brand loss. Not all the headlines, though, were negative.
Subway recently introduced a new limited-time offering: Doritos Footlong Nachos, welcoming novelty in order to draw in experimental consumers. And for sentimental souls, the company is reprising its $6.99 footlong offer through the end of May.
All these moves may be modest, but they attest to the fact that Subway is not dead—experimenting with new concepts, seeking viral fever, and attempting to restore a relationship with America’s lunch mob.
The Bigger Picture in Fast Food
Subway’s struggles aren’t a unique occurrence. The fast-food landscape overall is uncertain. Consumers crave better ingredients, more personalization, and technology-facilitated ordering.
Chipotle, Panera, and even convenience store deli counters are setting the new standard. Labor and food costs go up at the same time, however, and the sub shop business gets tougher than ever. Even McDonald’s, the fast-food giant, is trimming menus and closing underperforming restaurants.
So while 631 closures may be a disaster on paper, it’s all part of a larger industry trend. Adapt or die’ isn’t just a motto—it’s the new fast-food reality.
Is Subway Toast—or Just Getting Started Again?
Is this, then, the end of the line for the sandwich empire? Not on your life. New management, new design philosophy, and an international customer base ensure that Subway is not about to vanish into thin air.
But the era of unlimited growth via two-for-one footlongs is probably behind us. Instead, the brand is revving up—cutting the fat, rebranding itself, and hoping customers take it for a second chance.
Will it succeed? Only time will tell. But this much is true: Subway is back in the kitchen, exploring what the fast-food future looks—and tastes—like.
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