What is in this article?:
- Subway founder talks growth, health care, menu
- International growth, gauging unit saturation
Fred DeLuca discusses the sandwich chain's new virtual franchisee challenge and more
International growth, gauging unit saturation
And the video mentions possibly hitting 100,000 by 2030?
That’s not so much a goal. Ever since the 1990s, I’ve said there will be a big fast food company with 100,000 stores. Someone will get to 100,000. Because I could see the way the world was changing. People gravitate toward brands. Big chains are getting bigger. Many are global now. Looking at growth of the world and changing economics, I felt pretty confident that would happen.
Of course, when I first said that, we were teeny and the obvious choice to accomplish that would be a company like McDonald’s. But we could do it. It’s possible. And they could do it too.
So will we do it? I’m not ready to commit to a 100,000-store goal. Certainly it will take a long time. I’ve been at this all my life and we’re not even at 50,000.
I’ve heard company officials talk about Subway growing in Asia, Latin America and Europe this year. How would you characterize growth around the world now?
North America and Australia grow at a very good pace, but Australia is a peanut of a place, relatively. That’s not where the people are. The people are in Asia, Latin America, Europe. Those places will constitute a lot of growth. The Middle East will too.
Before the recession, Starbucks was once criticized by some for being ubiquitous in the U.S. There was a Starbucks on every corner, it seemed. Do you feel like there is a saturation point for Subway?
Yes, but I don’t know where the saturation point is. I take all of our territories and look at the highest density stores compared to the lowest. I look at sales and whether we have stopped growth or hit the wall in some way. And the odd thing is the highest density territories either equal or exceed the performance of the territories that are less dense. So it’s not like they’re slowing down, which tells me they haven’t hit the wall yet.
These high-density stores are in markets that have about one Subway store for every 8,000 or 10,000 people. That group is doing just fine. Certainly there’s a limit to any brand, and it may seem like we have stores everywhere. But in reality, on any given day, less than 2 percent of the population eats at Subway. The number we use is 1.7 percent. Three percent is within the realm of reason, and that would be a huge increase from where we are now. There are a lot more sandwiches to make.
Anything new coming to the menu this year?
Recently, we quietly switched to making chopped salads. We sold salads before, but about three months ago we sent everybody tools and started doing chopped salads.
You go down the line and put in your ingredients, and they put it in a stainless steel bowl and chop it up a bit with the dressing — you see this a lot in New York City now. Our salads were made in front of you before but we never chopped up the ingredients. It was a franchisee idea.
We put it in a few stores last year and it worked well. We’ve seen our salad sales (in those stores) increase about 50 percent over the course of two years, so I think we’ll see some nice growth.
Contact Lisa Jennings at firstname.lastname@example.org.
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