New items, value driving limited-service sandwich chains

by Bryan Salvage
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CHICAGO — In 2008, the Top 100 limited-service sandwich chains increased sales by 8.6%, to $20.3 billion. According to foodservice industry consultant Chicago-based Technomic, gains were driven by industry leader Subway, with strong execution of its $5 foot-long promotion and value positioning resulting in a 17.1% increase in sales to $9.6 billion.

The Top 100 outperformed the limited-service sandwich industry as a whole, which posted sales of $22.6 billion systemwide, growing by 6.9%.

"The limited-service sandwich chains that continue to perform well have conveyed a strong value equation to their customers — from craveable flavor profiles to reasonable pricing to convenience of ordering," said Darren Tristano, Technomic executive vice-president. "Given the challenging economic environment, leaders should understand the shifting expectations of their customers and be prepared to make the necessary changes to remain relevant, while keeping a watchful eye on margin erosion concerns."

Technomic’s new study, titled 2009 Top 100 Limited-Service Sandwich Chains Restaurant Report, covers trends, chains and products. Some of the findings include:

  • The Top 100 sandwich chains grew units by 1.8% in 2008 to more than 39,000 locations, outperforming the sandwich category’s growth of 1.4% and the total limited-service restaurant industry’s unit increase of 0.6%. The total restaurant industry’s units declined by –0.6% from 2007;
  • Subway led the sandwich industry in unit growth, adding 686 new locations in 2008. Atlanta-based Rising Roll Gourmet had the highest rate of growth at 71.4%, bringing its total to 12 units;
  • Menu trends among the Top 100 chains include use of flatbreads and premium ingredients, bolder flavor profiles, new hot panini-style sandwiches, healthier offerings and the use of natural, organic, local and sustainable sandwich components;
  • Chains continue to implement green initiatives to promote social responsibility, reduced energy costs and environmental protection;
  • Many quick-service operators are revamping to more upscale interiors to encourage customers to linger; and
  • Operators are increasing their use of the Internet to reach customers through social media sites such as Facebook, YouTube and Twitter.
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