Subway is in the middle of the grocerant niche with ready-2-eat fresh and prepared food and is building new units while building per-unit sales. Consumers are looking for new products, new packaging and time saving options in ready-2-eat and heat-N-eat fresh prepared food and Subway keeps them coming. They are attracted to Subway by the fresh focus, portion size, price points, and interactive participatory meal preparation.
The price, value, service equilibrium is resetting in Restaurants, Convenience stores and Grocery stores via fresh prepared food in the “deli”. The wildly successful Subway $5.00 foot-long started upsetting the cart. The QSR value focused $1.00 menu propelled it. Now Walgreens, 7 Eleven, Target, Amazon and Whole Foods are all selling fresh food and prepared meal components. Dollar stores are entering the crowded space and the consumer is going to win.
All retail food sectors have noticed a discontinuity in consumer food shopping behavior and all are fighting for share of stomach. Contributing to this displacement is a focus on short term market metrics particularly price and away from the consumer. Which in turn has caused a loss is consumer traffic for those with their eye off the consumer. There are other attributes that are much more important to the consumer than price yet many don’t take time to look. Subway is focused on the customer with “better for you” food positioning and is disrupting the retail food equilibrium.
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