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Subway: What's behind the sandwich chain's UK success?

Just before she tucks into an Italian BMT – a meaty sandwich filled with salami, pepperoni and ham – Dominique Santini explains why she loves Subway.

“It’s convenient, quick and it’s customisable,” she says.

The sandwich chain is also “everywhere”. “I was craving a Subway, walking around looking for one, and then, ‘Oh there’s one.'”

Subway is already the UK’s largest High Street fast-food chain and is looking to open another 500 stores by 2020.

That would bring its total to 3,000 across the UK and Ireland – significantly ahead of its closest rivals, Greggs and McDonald’s.

‘Cheap and healthy’

So what’s behind its popularity?

Speaking to people in a busy Subway at lunchtime, the same words keep coming up.

Cheap, convenient, and – perhaps surprisingly for a fast-food chain – healthy.

The chain’s main menu is “subs” – long, US-style sandwiches made with soft bread – and customers then pick from a variety of fillings and salad.

It might seem unlikely, but those salad toppings mean a six-inch “sub” counts as one of your five-a-day, at least according to Subway’s UK boss Peter Dowding.

Subway and other fast-food sites are increasingly looking to offer healthier choices, as customers at least want the option to count the calories.

“Health is something that lots of outlets are looking to add,” says Simon Quirk, a director at retail consultants Kantar Worldpanel.

But it’s still only a small consideration, with 86% of consumers saying they buy food on-the-go for practicality or enjoyment, he adds.

Food-to-go outlets are forecast to outgrow all other High Street food and drink options, reaching £7bn of sales by 2021, according to grocery specialists IGD.

In a crowded market, the distinctive Subway smell helps it to stand out from the competition.

“It’s like walking into a supermarket. They entice you in with that smell of bread,” says Michelle O’Connell, another Subway customer.

The smell comes from the sandwich bread, which stores bake at least three times a day, Mr Dowding says.

Subway outlets, which are run by businessmen and women as franchises, also have a reputation for opening early and closing late.

That partly comes from a stipulation that they are open at least 98 hours a week, according to Mr Dowding.

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But it’s not all been plain sailing for the US company.

It has faced questions about staff pay after the UK tax authorities found some of its franchisees were not paying the minimum wage.

Mr Dowding said the company took action, but declined to say what sanctions it imposed on the seven franchisees.

“It came up, we dealt with it. HMRC at the time was happy how we dealt with it and we moved on,” he told BBC Radio 5 live.

The Subway boss also had an ambiguous message on zero-hours contracts.

With such long opening hours, “it’s not in the franchise’s interest to offer zero-hours contracts, but we need a flexible working force and it is right for some people,” Mr Dowding said.

Subway’s vital statistics

  • The US company will open its 2,500th store in the UK and Ireland this month
  • Those outlets employ 18,500 people and have sales of £515m
  • They are run by about 900 franchisees, which are often local businessmen and women
  • Worldwide, Subway has 44,000 stores in 112 countries

Source: business

About Tom Mark

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