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Submitted by nsengo on June 3, 2006
Category: Business
Words: 3518 | Pages: 15
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CSubAway SSandwEich Sh op1s
Success in the sandwich segment requires operators to work significantly harder
than they did just a few years ago. There was a noticeable slowdown in the opening
of new submarine sandwich shops in 1992, although the growth rate still
exceeds most other restaurant segments. Competition has intensified, with hamburger
chains such as Hardee’s and Burger King experimenting with sub sandwiches
as menu additions. Subs seem to be a category anyone can participate in.
Subs offer easy entry into the foodservice business and a simple, low-cost route to
menu expansion, plus health appeal. Market data indicates that the sandwich is
firmly established as a nationwide food item and there is plenty of room for growth
in all areas. Many operators also see opportunities for sub-like concepts. For example,
one variety of sandwich shop that continues to expand specializes in Philadelphia-
style cheese-steak subs.
For sub shops, the Subway chain is the undisputed market leader, with 10
times more locations than any other competitor and more than 75 percent of all
United States sub chain outlets. As of mid-1993, Subway operated 7,825 units
worldwide, with about 7,750 units in North America. When it reached 8,400
stores in 1993, Subway was the No. 2 fast-food chain in the United States. By
opening its small sandwich shops at breakneck speed, Subway grew from $360
million in sales in 1987 to $2.2 billion in sales in 1992 (Figure 1–1), while income
increased substantially (Fig. 1–2). The former No. 2 was Pizza Hut, which operated
7,929 units in North America and expected to have 8,355 by the end of 1992,
However, in terms of sales, Subway ranks 12th among chains nationwide. Sales are
about 15 percent of McDonald’s.
Subway is also looking to expand its nontraditional sites. The chain has...
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