Thursday, April 20, 2017

Subway Shuts Hundreds of U.S. Stores

Subway Restaurants closed hundreds of domestic locations last year, marking the biggest retrenchment in the history of the chain.

The company closed 359 U.S. locations in 2016, the first time that Subway had a net reduction. The store count dropped 1.3 percent to 26,744 from 27,103 in 2015.

The retrenchment appears to because of fierce competition rather than the result of a business cycle trend.

The closely held company is coping with a sales slowdown in the U.S., made worse by the emergence of newer fast-casual rivals.

It was also probably too expensive to run some of the closed shops because of climbing minimum wage regulations.


(via Bloomberg)


  1. Or could have a lot to do that there spokesman for years was arrested and incarcerated for being a child molester. I know several people that still refuse to eat at Subway since that PR fiasco

  2. I know this is anecdotal, but in my area there is a TON of Subways. We are small area, population is around 60,000-70,000. We have some that are literally a 1 minute drive from each other. I think over saturation is also a factor in these closings in addition to the factors you mentioned. I'm curious if any of our Subways have closed. I would not doubt it.

  3. What about debt? I know it's private but over and over you point to labor costs when it could also be the inability to roll debt or debt levels.

  4. i thought subway was a corporation with franchises. i wasn't aware that the headquarters shut down subways.

  5. The local anecdotal evidence suggests competition. Within the last few years, our area has seen several Jimmy John's and Jersey Mike's sub shops open up, along with the local non-chain sub shops: Pat's Subs and Sub Station.

    We like them all, save for Jimmy John's, who insist on only carrying provolone cheese, whereas my family only likes american.

    Another big wave of openings has been in the barbecue joints. We've had a Buckwheat's and a Willie Jewell's open up within the last year. Boy, I could eat pulled pork and cole slaw for breakfast, lunch, and dinner - if I had the money.

  6. Our small town, population ~40,000 has four Subways. Not surprising they are oversaturated.

    That said, why does RW write that it is due to competition and no the business cycle? Where is the evidence for that? The Bloomberg article says "Industrywide, same-store sales continued to slide in the U.S. during March."

    Fortune recently reported that restaurant sales are down across the board.

  7. Restaurant performance index continues down. Of course it is the economy.

  8. I ordered a roast beef sandwich and they put near no beef on it. It was all veggie and bread. I never went back.

  9. Another factor is that people started finding out that it was extremely unhealthy food they were pushing on its customers. Stories of flame retardants in their bread etc. Much like the pink slime fallout... I haven't eaten that crap since before I found out that the government's version of healthy eating is a lie. And I'll never go back.