Subway considers closure of 500 stores in US in a global expansion bid

USA – Subway, the American privately held fast food restaurant franchise is considering closure of 500 of its stores in the US in 2018 as it seeks a global expansion outside North America.

The chain will add more than 1,000 locations outside its home with a focused growth agenda in U.K., China, India, Latin America.

In an interview with Bloomberg, Suzanne Greco, CEO of Subway said as the sandwich maker embarks on an international expansion; it will be closing down some of its US stores.

Over the last two years, the company has been retrenching closing down over 900 stores with the total U.S. count dropping to 25,908.

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According to data researcher Technomic, Subway has been struggling with sales which fell 4.4% as a result of competition from emerging chains including McDonald’s whose domestic system sales rose 3.4 percent last year.

Some of its franchises have cried foul their stores were in danger of closure and that up to one-third of Subway locations in the US are unprofitable.

Business Insider reported that the chain is also struggling with oversaturation and internal conflict, making a quick turnaround difficult and that Subway’s head of North American marketing, Karlin Linhardt, resigned from the company.

As a remedy to its struggling sales and attract customers, the chain unveiled a loyalty program that offers discounts and free items available for the chain’s domestic and Canadian locations, in addition to menu innovation.

Apart from closures, Subway is also relocating its stores, remodelling them for a sleeker look with touch-screen ordering kiosks.

“We want to be sure that we have the best location,” Chief Executive Officer Suzanne Greco, 60, said in the interview.

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“We focused in the past on restaurant count. We’re focused now on strengthening market share.”

“Store count isn’t everything,” she said. “It’s about growing the business.”

Subway manages 43,700 stores globally and is entirely owned by franchisees.

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