Does Subway's Current Marketing Resonate Better Inside the US or Outside the US?

 

Subway, one of the world's largest quick-service brands, has been on a mission to reinvigorate its business, and its marketing strategy plays a critical role. Steven Johnson the Grocerant Guru® at Tacoma, WA based Foodservice Solutions® asks is Subway's current marketing approach resonating more effectively inside the U.S. or outside? Success does leave clues and according to recent press releases and performance data suggest that Subway’s international markets may be responding more favorably. This article explores why Subway’s marketing appears to resonate differently in the U.S. compared to its global presence and provides four examples for each perspective.

Why Subway’s Marketing Resonates Better Outside the US

1.       International Expansion through Master Franchise Agreements Subway’s global growth strategy focuses on partnering with master franchisees, which has led to explosive growth internationally. In just three years, Subway secured over 10,000 international restaurant commitments, far outpacing its U.S. growth. In 2024 alone, 40% of new Subway openings are set to occur internationally, supported by seven new master franchise deals, including entry into new markets like Paraguay and Mongolia.

This strategy of leveraging experienced multi-unit operators outside the U.S. has been key to Subway’s resurgence. International markets are welcoming these partnerships, which allow Subway to scale rapidly in untapped regions with tailored marketing messages that resonate more strongly with local tastes and preferences.

2.       Localization and Format Flexibility Subway’s international marketing efforts focus on adaptability to local tastes and nontraditional locations. In countries like Spain and Mexico, Subway is expanding into airports, while it’s entering hospitals and college campuses in various regions. This localization provides Subway with a strategic advantage, allowing the brand to cater its product and messaging to different customer bases.

Unlike the U.S., where many locations have closed, these new international venues offer Subway a fresh opportunity to craft hyper-localized marketing strategies that resonate with unique cultural and consumer preferences, enabling stronger brand adoption.

3.       Global Same-Store Sales Growth Subway experienced positive global net growth in 2023 for the first time since 2016, with global same-store sales rising 6.4%. International markets played a significant role in this resurgence, suggesting that Subway's marketing messages are landing well outside the U.S. The brand’s “Fresh Forward” redesign, focusing on enhancing the guest experience with modernized interiors and digital enhancements, has contributed to this growth.

The adaptability of Subway’s marketing internationally—showcasing fresh, healthy options and newly remodeled stores—has proved effective in markets where consumers are particularly responsive to branding focused on health, quality, and convenience.

4.       Engagement through Digital Sales and Rewards Programs Subway’s international digital sales surged by double digits in 2023, significantly driven by the enhancement of the Subway MVP Rewards loyalty program. This digital push aligns with global trends of increasing mobile ordering and delivery services. International consumers, often more receptive to digital innovations, have embraced these efforts.

By focusing on robust digital marketing and rewards programs, Subway has been able to better connect with international consumers. This focus on convenience and rewards resonates more with a global audience that prioritizes digital engagement in their dining experience.

Why Subway’s Marketing Still Holds Appeal in the U.S.

1.       Top 75% of U.S. Stores See Significant Growth Despite the U.S. store count dropping to 20,133 in 2023 (a loss of 7,000 locations since 2016), the top 75% of Subway’s U.S. stores have seen significant same-store sales increases, up 10.1% year-over-year. Subway’s marketing in the U.S. continues to resonate strongly in high-performing markets, likely due to a focus on digital transformation and loyalty programs.

These high-performing locations benefit from modernized restaurant designs, enhanced digital ordering, and loyalty integration, demonstrating that Subway’s U.S. marketing efforts can be effective in areas where the brand has invested in improving the overall guest experience.

2.       Brand Modernization and Digital Sales Subway’s U.S. digital sales have also seen double-digit growth in 2023, driven by its loyalty program and enhanced online presence. The introduction of more user-friendly mobile apps and online ordering has resonated with a U.S. audience that values convenience. In addition, Subway’s focus on healthier options, customization, and affordability continues to appeal to health-conscious U.S. consumers who seek fast yet nutritious meals.

The modernization of Subway’s U.S. stores, coupled with a revamped menu and fresh marketing campaigns, has helped the brand slowly reverse the trend of declining sales, showing that the right digital tools and messages still resonate with American consumers.

3.       Focus on Nontraditional U.S. Locations Subway has entered partnerships with major U.S. companies like Walmart, Aramark, and Love’s Travel Stops, which represent 25% of Subway’s global footprint. This focus on nontraditional U.S. venues, such as convenience stores, gas stations, and supermarkets, has allowed Subway to tap into captive audiences who might be seeking quick, healthier meal options while on the go.

This pivot in marketing to target convenience-seeking consumers shows that Subway understands the evolving needs of U.S. diners. By positioning itself as a quick, healthy option in these nontraditional settings, Subway has found new avenues to drive brand engagement in the U.S.

4.       Roark Capital Acquisition and New Leadership The acquisition of Subway by Roark Capital for $9.6 billion in 2023 marks a significant shift for the brand. Roark’s involvement could lead to a renewed marketing push in the U.S., focused on revitalizing the brand and regaining market share. Roark’s expertise in the restaurant industry, paired with Subway’s size and scale, presents opportunities for growth, particularly through innovative marketing strategies that appeal to both legacy and new U.S. customers.

With fresh leadership and capital infusion, Subway has the potential to reposition itself within the competitive U.S. market through more targeted marketing campaigns that align with current consumer demands for healthy, affordable, and fast options.

Think About This

Subway’s marketing is clearly resonating differently inside the U.S. compared to international markets. While international growth has been more robust, thanks to strategic partnerships and localized marketing, the U.S. still offers significant opportunities, especially in high-performing stores and nontraditional venues. Subway’s ability to adapt its messaging, embrace digital transformation, and modernize its stores will be key to whether it can maintain its relevance both at home and abroad.

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information.