Limited-service sandwich chains grow: Technomic

by MEAT&POULTRY Staff
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CHICAGO — Despite the downhill economy, a number of top limited-service sandwich chains exhibited growth, according to foodservice consultancy Technomic. In 2007, Subway added nearly a half-billion dollars in revenues and 440 new units over the prior year. Quiznos registered the second-highest sales growth, with $261 million and 178 units, according to Technomic’s new 2008 Technomic "Top 100 Limited-Service Sandwich Chains Restaurant Report".

"Though the economy has moved from bad to worse, the limited-service sandwich segment is holding its own," said Darren Tristano, executive vice president at Technomic. "Its resilience comes from its ability to provide customers with a range of offerings from low cost to high end. The Top 100 Sandwich chains have displayed an array of tactics for weathering the economic storm — from revising their pricing strategies to making menu offerings more memorable and substantial to renovating their stores."

The study identifies the leading limited-service sandwich chains, analyzes top performers by sales and units, looks at important trends in the segment, and provides insight into where limited-service sandwich opportunities exist.

Other findings include:

* The limited-service sandwich industry totaled $21.2 billion in sales in 2007, of which the Top 100 accounted for $18.8 billion, or 89% of the total.

* Sales for the Top 100 grew 6.4%, outperforming the overall sandwich industry’s growth of 5.7%.

* Unit growth of the Top 100 was up by 1.8% for a total of 38,790 units, compared with growth of 1.6% for the limited-service sandwich industry with a total of 55,610 units. The Top 100 makes up nearly 70% of the industry’s units.

Subway was the category leader with sales of more than $8 billion, which accounted for 43.5% of total Top 100 sales. Arby’s followed with an estimated $3.3 billion in sales, comprising 17.6% of Top 100 sales. Rounding out the Top three is Quiznos Subs with an estimated $1.9 billion in sales, or 10% of the Top 100’s total.

Remaining chains in the Top 100 are much smaller in size. The median size chain had sales of $23.1 million.

Within the limited-service sandwich segment, the Sub, Deli and Sandwich sub-categories represented the greatest number of concepts. Sub-categories with the highest 2007 sales were Sub at $12.2 billion and Roast Beef at $3.4 billion. The Sandwich and Deli sub-categories showed the greatest percentage sales growth, with 19% and 11.1%, respectively.

Within the Top 100 chains, more than a quarter of limited-service sandwich restaurants (27 chains) have implemented online ordering at all or select store locations. Delivery is available at 24 of the Top 100 at some or all stores.

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