Subway is straying from the business model that made it the biggest fast-food chain in the world

·3 min read
Subway sandwich assembly line
Irene Jiang / Business Insider
  • Subway just introduced a new menu with 12 sandwiches designed to be ordered as-is, without customization.

  • The menu is a departure from Subway's historical emphasis on customization.

  • The new menu could increase sales and simplify operations in Subway's kitchen to reverse a sales slump.

Subway is launching its new Subway Series menu as a major departure from its historic "create your own" business model.

The new menu includes a list of 12 sandwiches that customers can order as is, which is the norm in most restaurants but a big change for Subway. They come in four groups: Italianos, chicken, clubs, and cheesesteaks.

The sandwich chain grew popular for its customized sandwiches made by workers right in front of customers, who could point to exactly which ingredients they wanted. "Customers walk into a Subway with the expectation that they will customize their sandwich... It's the foundation that Subway was built on and the way it's been for 60 years," Subway said in a press release announcing the new menu.

Now, Subway is repositioning the menu to be more like other quick-service restaurants, asking customers to "trust their culinary expertise, and trust in the sandwich artists to create a sandwich Subway believes customers will enjoy," the chain said.

The new sandwiches became available Tuesday, though customers can still make substitutions or create their own sandwiches.

There are a few potential reasons for the new menu. A standardized menu with less focus on customization has the potential to make operations faster for workers by reducing complexity. Tests showed that the new menu "sped up operations" and led to fewer questions from customers, Subway North America president Trevor Haynes told Insider at a press event.

Faster service could lead to higher sales volumes and more profit, Kalinowski Equity Associates president Mark Kalinowski told Insider. Subway has relatively low unit sales compared with competitors like McDonald's and Wendy's, so the simplified menu could speed up lines and potentially lead to more sales. Subway's 2021 menu refresh bumped sales after a downward trend and showed some hope for the chain, so another more ambitious change could be promising.

Creating a menu with pre-selected options could also push customers who do want to customize orders towards digital orders. Digital orders continue to grow across the industry, and the format is "great for customization," Kalinowski noted. Digital sales are attractive to businesses thanks to better margins, speedier preparation, and lower costs in maintaining dining rooms, as customers typically take the food to go.

Subway's embrace of total customization kick-started a trend that took over fast food, becoming huge with the rise of Chipotle and showing up across the industry, from Sweetgreen to Cava. Chipotle in particular grew famous following a similar assembly-line model where customers could point to ingredients and watch them become part of a bowl or burrito. Now, it's embracing the opposing trend in the industry: simplification, Kalinowski said.

It's a "smart move" that could lead to better customer experiences and improved sales, Kalinowski told Insider. Results in the upcoming quarters will show if it's enough to reverse Subway's trend of closing stores and losing franchisees.

Are you a Subway employee with thoughts on the new menu? Email this reporter at mmeisenzahl@businessinsider.com.

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