Money

Subway is Taking Another Big Blow as Sales Drop Again

April 2nd 2016

By:
Danielle DeCourcey

Former Subway spokesman Jared Fogle's pedophilia scandal certainly hurt the brand last year, but the chain restaurant's problems haven't stopped there.

Subway saw a huge sales decline in 2015 even with the addition of new stores, according to restaurant consultancy, Technomic. The firm told Buzzfeed News that sales fell by 3.4 percent, in addition to the 3.3 percent drop in 2014. Subway is getting pressure from chains like Jimmy John's, Jersey Mikes, and Firehouse Subs, who are all seeing annual sales soar, some as much as 30 percent. What's more, people aren't getting enough foot-long for their money; the company moved away from $5 footlongs, (clutches pearls), and people did not like it.

Technomic's Mark Brandau wrote on the company's blog that while the prices have gone up, the food isn't any better.

"Where Subway became vulnerable to QSR Plus competitors was on the menu board. As Subway’s prices have crept upward with the promotion of premium footlongs and the $6 price point rather than $5, perceived freshness and quality have not. Fast-casual brands from inside and outside the sandwich segment have also made inroads into Subway’s positioning as the health leader in limited service."

Although price is the main reason Subway is struggling, last year's Jared Fogle scandal didn't help either. Subway branded itself as an inexpensive healthy option and used "regular guy" Jared as a weight loss role model for nearly 15 years.

Fogle is now serving time for child pornography and sex with minors. In the last two years, the company's reputation took more PR hits after Subway was sued for selling 11-inch subs and accused of including the chemical azodicarbonamide (the FDA-approved bleaching agent) in its bread. With one mishap after another, the chain needs to rethink it's business strategy stat.

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