Subway’s Quest to Reclaim Customer Momentum: Leading with ‘Better for You’

 

As fast food continues to be dominated by price wars and value-driven menus, Subway finds itself on a different path, relying on its foundational “better for you” brand promise according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

For decades, Subway positioned itself as the go-to fast-food option for health-conscious diners, offering customizable, veggie-packed sandwiches and emphasizing freshness over fried. However, regaining momentum in the fast-food market while remaining profitable is no small feat, especially when competitors aggressively leverage pricing to attract legacy customers.

The Core of Subway's "Better for You" Promise

Subway's branding has long revolved around three key aspects:

1.       Customizable options, allowing healthier ingredient choices.

2.       Nutritional transparency, promoting calorie-conscious dining.

3.       Wide availability of fresh produce and lean proteins compared to fried or highly processed alternatives.

While these traits resonate with a portion of consumers, they face pressure to remain affordable in a marketplace driven increasingly by “2 for $5” and other low-price offerings. Competitors are banking on perceived value and volume rather than a niche health positioning to bolster unit sales.

The Challenges: Why Boosting Profits Without New Customers Is Tough

Subway faces a unique set of challenges in its pursuit of higher profitability:

1.       Limited Pricing Flexibility
Subway’s brand is historically tied to affordability, with its $5 Footlong campaign once becoming a cultural phenomenon. Introducing higher-priced menu items risks alienating core customers while failing to attract new ones.

2.       Customer Migration to Competitors
With a portion of consumers opting for bundled deals like McDonald’s Extra Value Meals or Taco Bell’s Cravings Box, Subway’s focus on premium options leaves it vulnerable to losing value-seekers entirely.

3.       Dependence on Loyalty Without Innovation
Without new menu innovations or unique offerings, Subway risks relying on a declining loyal customer base that increasingly demands exciting and diverse flavors.

4.       Operational Efficiency vs. Ingredient Quality
Higher ingredient costs for premium, fresh items can limit profits, particularly without streamlined operations to offset expenses.

Competitors’ Strategies: Leveraging Price to Gain Legacy Customers

Subway’s competitors, particularly McDonald's, Taco Bell, and Wendy’s, are thriving on value-driven campaigns that attract both budget-conscious diners and volume sales:

1.       Bundling and Meal Deals
Competitors frequently roll out family-sized value meals or dollar menu items, encouraging customers to buy more. For example, Wendy’s 4 for $4 has created a loyal following, building traffic in-store and online.

2.       Limited-Time Promotions
Leveraging promotions like McDonald's Famous Orders campaigns, competitors create buzz while keeping prices approachable, creating a fear-of-missing-out (FOMO) effect that drives in-store traffic.

3.       Tech-Driven Value Perception
Mobile apps offer exclusive discounts and rewards, gamifying value-driven eating in ways that Subway has yet to master fully.

4.       Breadth of Menu
Diversified offerings, such as Taco Bell’s variety of nacho boxes or McDonald's mix-and-match deals, ensure repeat visits while staying wallet-friendly.

What Subway Can Do to Stay Relevant

To compete effectively, Subway must amplify its “better for you” message while finding creative ways to appeal to value-conscious consumers without devaluing its brand. Possible strategies include:

·         Offering “Better for You Bundles” with a balanced mix of nutrient-packed sandwiches, sides, and drinks.

·         Introducing Tiered Rewards in loyalty programs to incentivize frequent purchases.

·         Doubling Down on Localized Innovations that offer regional or culturally relevant menu items, leveraging mix-and-match options.

·         Enhancing Tech Integration by personalizing deals based on ordering history, further targeting customer needs.

Subway’s challenge is one of balancing its heritage and profit margins. By evolving its model with smarter pricing, innovation, and a tech-enabled customer focus, the chain may yet regain its stride without abandoning the principles that made it a household name.

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.