Subway set multiple financial records in the second quarter ahead of an expected sale announcement in the coming weeks.
The sandwich chain achieved its highest Northern American AUV for three straight months and reached its best weekly AUV in recorded history. In Q1 and Q2 combined, Subway experienced positive traffic across North America and growth in same-store sales, which the brand attributed to menu innovation, modernization of stores, and improvements to the guest experience.
In the first half of 2023, global comps rose 9.8 percent year-over-year—the chain’s 10th straight quarter of positive momentum. For North America, same-store sales jumped 9.3 percent, with the top 75 percent (17,000 restaurants) growing 14.5 percent. The top 50 percent (11,500 restaurants) lifted 19.8 percent.
Subway’s digital sales have more than quadrupled since 2019. In Q1 and Q2, global digit sales increased 11.1 percent. In North America, the channel grew 17.8 percent. The company plans to enhance these efforts even further with a refreshed loyalty program that will be launched later in 2023.
“Over the past two years, we’ve made consistent progress across all areas of our business, driving impressive sales results and positive changes for our franchisees and guests,” CEO John Chidsey said in a statement. “The strong sales momentum from the first half of 2023 is setting the tone for another exceptional year for Subway and our franchisees.”
The sales figures don’t include the impact of Subway’s new Deli Heroes lineup, which was introduced in early July. The sandwiches—Titan Turkey, Grand Slam Ham, Garlic Roast Beef, and The Beast—are made with freshly sliced meats. The brand invested $80 million to put a meat slicer in every restaurant at no charge to franchisees.
In terms of development, Subway has remodeled 10,000 of its U.S. restaurants into the “Fresh Forward” design, featuring LED lighting, new floor coverings, containers, tables, colors, and chairs. Also, the chain is making progress toward its goal of increasing North American openings by 35 percent in 2023.
Subway ended 2022 with 20,576 units in the U.S., down a net of 3,223 stores from the end of 2019. As part of the company’s multi-year transformational journey, the development strategy has focused on relocating restaurants to more suitable trade areas and opting for multi-brand franchisees with plenty of operating experience. Internationally, Subway has signed 15 master franchise agreements in the past two years. Altogether, these deals across Europe, the Middle East, Africa, and Asia Pacific will result in 9,000-plus stores. In the past 18 months alone, the chain has debuted more than 1,000 locations globally, with more than 40 percent fueled by master franchisees.
The positive sales figures come as Subway continues to work through a sales process. Some of the reported candidates include Roark Capital—parent of Inspire Brands and Focus Brands—Bain Capital, TPG, Advent International Corp, TDR Capital, and Goldman Sachs. There have been multiple reports of how much the company is worth, with the highest figure being $10 billion.
