NEW YORK —A raid at the home of “Subway guy” Jared Fogle is just the latest trouble to hit the ubiquitous sandwich chain.
The company has been struggling with sales; its CEO, Fred DeLuca, was diagnosed with leukemia; and it is trying to persuade customers that its food delivers value and quality ingredients.
Subway, the largest restaurant chain with about 44,000 locations globally, is privately held and doesn’t publicly report its financial results. But last year, market researcher Technomic said average annual sales at U.S. Subway locations fell 3 percent to $475,000. That was the first decline since 2006.
The company hasn’t explained what it thinks might be hurting sales. But in an interview last month with The Associated Press, Subway chief marketing officer Tony Pace noted that sales are a “multivariable equation” and that value promotions and prices don’t get a lot of attention. That suggests that one factor affecting performance could be its shift away from its $5 Footlong deal.
“It’s a challenging thing for chains that have built so much of their business off a discount,” said Jonathan Maze, editor at the trade publication Nation’s Restaurant News.
Perceptions of what is healthy are always in flux, which means foodmakers can suddenly find themselves on the wrong side of a trend. Subway, for instance, could be hurting from the popularity of gluten-free diets.
Food industry executives also say people are showing more interest in things such as ingredients and quality, rather than calories and weight loss.
Subway may still be hurting from a petition last year that called on it to remove an ingredient from its bread that is also used in yoga mats.
