ANALYSIS
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Fast-Food Star of Recession: $5 Footlong
Subway is rewarded for listening to franchisee
By John Johnson
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Posted Nov 7, 09 11:34 AM CST
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(Newser)
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BusinessWeek has found what it calls the "fast-food success story of the recession"—the $5 footlong sandwich from Subway. The simple idea began with a franchisee who noticed slow sales on weekends and decided to knock down prices to bring in customers. After sales went through the roof, he pitched it to a skeptical headquarters, which eventually bought in. The helpful kicker: Because of extra customer volume, each sandwich is still profitable, unlilke most sales gimmicks of this kind.
"There are only a few times when a chain has been able to scramble up the whole industry, and this is one of them," says a restaurant consultant. "It's huge." So huge, writes Matthew Boyle, that "the $3.8 billion in sales generated nationwide by the $5 footlong alone placed it among the top 10 fast-food brands in the US." It also helped the chain increase sales 17% last year in tough industry times.