America’s Largest Sandwich Chain Is Losing Customers, and This Is Its Biggest, Fastest-Growing Rival — Eat This Not That

Last year, in an effort to regain some of its former popularity with customers, America’s largest sandwich chain Subway announced a major menu overhaul. Ingredients were swapped out for higher quality versions, new signature subs were introduced to the menu, and a million of them were given away to customers for free.

According to subsequent Subway sales figures, the move appears to have worked. Its August sales, which were directly boosted by the new menu, were up 4% from 2019. On a yearly basis, despite the chain closing nearly 1,000 restaurants in 2021, its sales to system scale increased by 13%.

While this is undeniably a step in the right direction for a channel struggling to stay relevant, the recovery may not be as big as it seems.

And don’t miss America’s largest sandwich chain is now selling subs using this unusual method.

According catering company, this growth pales in comparison to the average growth of other similar sandwich chains, which was around 21.5%. Additionally, the company’s market share has declined by 10% since the pandemic began, according to data from Technomic’s Top 500 Chain Restaurant Report. Specifically, Subway’s market share has gone from 58% to 53% over the past two years. In other words, it is doing well, but losing customers to its competitors.

And currently its biggest rival seems to be Jersey Mike’s Subs. What started as a small store called Mike’s Subs in Point Pleasant, NJ, has grown into a powerhouse sandwich chain known for its quality ingredients. The chain has more than 2,000 locations across the country, with those stores averaging around 20% EBITA margins across the business, according to Deductible 500. In fact, its sales have increased by 65% ​​over the past two years.

mike's subs
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So what does Jersey Mike have to offer? Many, including a fan base so loyal that one fan even became a franchise owner.

catering company also notes that Jersey Mike’s performance was in part due to his “early use of technology, a quick decision to enthusiastically jump on the third-party delivery bandwagon, and [the CEO’s] willing to go against franchisor convention by doing something as bold as paying for franchisee renovations.”

Then there is his commitment to give back. For example, on March 30, all Jersey Mike’s restaurants donated 100% of their sales, a record $20 million, to the 2022 Special Olympics USA.

“It created our biggest day of sales yet. Thank you to our customers, franchise owners, team members and the Special Olympics family for making a difference!” said Caroline Jones, senior vice president of Jersey Mike’s Franchise Systems. In 2021, the channel raised $3 million for Feeding America.

CEO Peter Cancro estimates the franchise will reach 3,000 units within three years. “We’re riding a wave,” Cancro said. Deductible 500. “Nobody ever knew about us. And the last two years they know.”

For Subway, Mike’s is one to watch in the coming years.

Melissa Fiorenza

Melissa Fiorenza has been writing for over a decade on a range of topics, including mental health, nutrition, fitness, parenting, and women’s issues. Read more

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