The popular restaurant chain Subway is going through tough times. Last year, they closed many of their locations, which led to a decrease of 1.3 percent in their store count. In 2015, they had 27,103 restaurants open. This number shrunk to 26,744 in 2016.
Declining sales determined Subway to close some of their units
Bloomberg were the ones that confirmed the number of 359 closed units among the Subway chain. The news source claims that this is the highest number of closed restaurants in the history of the fast food chain. They indicated several factors which could have influenced this decline.
Subway have not registered so many sales lately, at least in the United States. Also, after once being leaders in their niche, they suddenly had to face fierce competition from newly emerged opponents. They have been relying on several types of promotions or discounts, in the avid search for customers.
What looked like a strategy at the beginning ended up affecting the profit of the restaurant chain. Thus, they saw how their domestic growth decreased over the past few years, so they had to resort to closing a few units and reduce the expenses.
The North American sales decreased, while the international ones flourished
The U.S. sales went down in 2016 by 1.7 percent, turning from $1.7 billion to $1.3 billion. However, the situation is improved by the international sales. CNNMoney reported that the company has stores in more than 112 countries, with over 44,700 units operating in the franchise. They experienced a sale growth on the international market by 3.7 percent, reaching $5.8 billion.
This Wednesday, Subway announced a new change. Karlin Linhardt will be the new Senior Vice President of Marketing. He will deal with the issues regarding marketing in North America. Among his other responsibilities, there are advertising, dealing with media projects, research, statistics, analytics, creativity in development, as well as organizing special events and offering or receiving sponsorships.
Joe Tripodi, the Chief Marketing Officer of Subway, is optimistic that the naming of Linhardt will bring only benefits to their company.
“Karlin strategically and operationally understands our business, and the challenges our franchisees face every day. He will be an impact player as we transform Subway at every consumer touchpoint in North America.”
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