Industry News | December 5, 2011

Subway Offers a $2 Sub

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Subway announced plans for a $2, six-inch sub sandwich promotion for the month of December. The deal is good only on its popular meatball and cold-cut subs.

In a still-struggling economy, the chain that set the industry standard with $5 foot-long subs is throwing down yet another gauntlet that's certain to raise industry eyebrows and lure deal-seeking customers.

Several other major fast food chains also dabbled this year with $2 meals — including Taco Bell, Chipotle, and some regional KFCs.

"It's a magical price point," says consumer psychologist Kit Yarrow.

"What it communicates to consumers is that Subway is on their side."

December is typically a slower month not just for Subway but for the entire fast-food industry.

The Subway deal is the lowest-price 6-inch sandwich that the chain has offered in years, says Tony Pace, marketing chief at Subway's franchisee advertising fund. "We're just showing folks a little love when everyone is fretting about the economic future," he says.

Unlike many items on some fast-food dollar menus, this $2 sub may have higher consumer quality perception — and it can almost pass as a small meal in itself. For the company widely known for promoting the $5 sub sandwich, this is upping the ante. Two of the six-inch subs would fetch $4 — lower than its bargain $5 foot-long.

For Subway, it could add up to a huge December, says Yarrow, in part because most consumers who come in for the deal will spend more than they intended.

"The recent success of Black Friday is because retailers did an amazing job throwing out deals," Yarrow says.

"There's just one question on the mind of every consumer today: How can I get a deal?"

Other fast food chains that tried $2 deals in 2011:

•Taco Bell rolled out its $2 Meal Deals with great fanfare in mid-2010, and most of its locations continue to offer the $2 deal that consist of a taco or burrito, medium drink and bag of Doritos chips.

•Chipotle on Halloween sponsored a "Boorito" fund-raising promotion that offered $2 burritos to customers dressed in costumes linked to family-farm-grown foods.

KFC tried a $2 regional promotion in the Los Angeles market on Sept. 7, in honor of Colonel Sanders' birthday, that included two pieces of chicken and a buttermilk biscuit.