Subway’s Booming “Sidekicks” Menu Driving Significant Sales Turnaround Over a Decade

Subway
Unsplash/Matheus Bardemaker

Subway, the well-known fast-food chain, is starting 2024 with a flourishing new menu category that surpasses sales expectations and generates fresh momentum after a year of record business results.

Subway has achieved substantial progress in the last three years, where their focus on improving customer experience and emphasizing restaurant-focused branding has led to 12 consecutive quarters of growth in same-store sales, marking a noteworthy turnaround, which Subway hadn't experienced in over a decade or longer.

Subway's Transformation into a Guest and Restaurant Experience Brand

Subway CEO John Chidsey, speaking on "Mornings with Maria" Monday, mentioned that they initiated their turnaround about three years ago, where they developed a plan to transform Subway into a brand emphasizing guest experience and restaurants, highlighting over half of the restaurants have now been remodeled with their efforts in menu innovation and quality.

Subway, with the highest number of store locations among U.S. fast-food chains, has enlisted celebrity spokespeople in recent years, including Patrick Mahomes, Jimmy Garoppolo, Serena Williams, and Derek Jeter.

Sidekicks: Subway's Game Changer

The new "Sidekicks" menu has played a crucial role in Subway's success. The chain gained attention recently with the launch of its new menu, featuring foot-long cookies, churros, and pretzels in partnership with Cinnabon and Auntie Anne's, selling 3.5 million Sidekicks in the first two weeks, according to the CEO.

"You've got to have quality, you have to have crave, and I think a lot of our menu innovation ties in nicely," Chidsey said.

In a press release last week, Subway mentioned strong demand for the foot-long cookie, leading the chain to quickly increase its supply and temporarily remove from third-party food delivery apps in local markets, including DoorDash, Uber Eats, and Postmates.

Subway's Reported Sales and Anticipated Global Expansion

Subway experienced double-digit growth in global digital sales in 2023, including a 21.8% increase in North America. The CEO reported signing 15 master franchise agreements and having a backlog of over 9,000 restaurants to be built internationally. Chidsey aims to sign three to six more deals this year, with hopes that the backlog will reach around 12 or 13,000 by the end of the year.

Subway's Future Growth Plans After $10 Billion Sale

Chidsey expressed satisfaction with the remodeling of 12,000 restaurants in recent years but emphasized that it's only 50%. Hence, remodeling the remaining 10,000 to 12,000 restaurants in the U.S. and Canada has yet to be done.

The Wall Street Journal reported that Roark's offer was $9.6 billion, initially listed at $10 billion in February. Subway was sold to Roark Capital in August, but the CEO noted that the new ownership won't take effect until the second quarter of 2024. The plan is to maintain the asset as a standalone entity. Regardless of the change in ownership, the strategy and plan of the last couple of years will continue unchanged.

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