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Can Jersey Mike’s Challenge Subway’s Dominance in the Fast-Food Industry?
In the realm of fast food, submarine sandwich chains have evolved into major players, with increasing competition rising up over the years. Among the giants of this industry, one name stands tall: Subway. Once an underdog, Subway now strides confidently alongside fast-food titans like McDonald’s.
Subway’s journey began modestly in 1965 as Pete’s Super Submarines, before rebranding to Subway in 1968. Franchising followed in 1974, propelling its growth to 500 stores by 1985 and a staggering 11,000 by 1995. Key to Subway’s ascent was its embrace of health-conscious branding, positioning itself as an alternative to greasy fast food. The introduction of the “five-dollar footlong” deal solidified its appeal, attracting crowds of budget-conscious diners.
However, Subway’s success has faced controversy and scrutiny at times over the years. For instance, its “status as a healthy alternative was questioned when the Supreme Court of Ireland ruled that the chain’s bread had too much sugar to meet the nation’s legal definition in 2020,” according to Chain Store Guide. Subway might not be as healthy as it was once considered to be, especially when compared to restaurants like Sweetgreen, but it continues to thrive globally.
While Subway set the precedent for sub chains in the industry, Jersey Mike’s Subs has emerged as a formidable competitor, blending customization with quality and offering a premium spin on traditional favorites. Unlike Subway’s assembly-line approach, Jersey Mike’s prides itself on sliced-to-order meats and a slower, more personalized service — though Subway did announce last year that it would start using freshly sliced meats. Jersey Mike’s commitment to premium ingredients and grilled-to-order subs has won over discerning palates seeking a departure from fast-food conformity.
Per Chain Store Guide, “It is a measure of their success that their competitor Subway has attempted to fold so many of these ideas into their latest rebranding.”
Recently, the company announced “a development agreement to open 300 Jersey Mike’s restaurants across Canada by 2034, via a combination of Redberry-owned-and-operated stores and supported franchisee locations.” This is Jersey Mike’s first big international expansion in its 68-year history.
Furthermore, Jersey Mike’s Subs recently unveiled a major website overhaul. The Manasquan-based fast-casual sandwich chain aims to mirror the visuals of its app, offering an array of improvements for users.
The redesigned website introduces a slew of upgrades, including a more efficient order process, integrated delivery options, and access to exclusive promotions. Scott Scherer, the company’s chief information officer, underscored the significance of this update, highlighting its alignment with the brand’s overarching goals. The revamped website allows Jersey Mike’s marketing team to easily deploy tailored promotions and announce events like Double Points Day or initiatives like the Month of Giving.
Rich Hope, chief marketing officer at Jersey Mike’s, emphasized the company’s customer-centric approach. “Whether joining us in our restaurants or through our app or online, we want to ensure our customers have a seamless, authentic experience,” he said. Hope asserted that digital decisions are informed by real-world experiences in their stores, ensuring authenticity across all touchpoints.
Beyond ordering sandwiches and accessing exclusive deals, the website remains a hub for various functionalities. Users can locate nearby stores, arrange catering services, manage loyalty accounts, and retrieve nutritional information. Additionally, the platform facilitates the purchase of gift cards and branded merchandise.
This revamp came just in time for Jersey Mike’s 14th annual Day of Giving on March 27, where the entirety of a day’s sales, projected to exceed $21 million, will be donated to charity. With over 2,700 Jersey Mike’s Subs establishments nationwide participating, this initiative is set to benefit over 200 local charities. Notably, the overhauled website facilitates donations to the franchise’s partner charities, matching contributions made in-store and via the app.
This Day of Giving marks a significant event for both the sub chain and the communities it serves. Notable figures like actor and New Jersey native Danny DeVito have joined forces with Jersey Mike’s founder and CEO Peter Cancro to encourage patrons to participate in this philanthropic endeavor.
The Day of Giving serves as the pinnacle of Jersey Mike’s March Month of Giving campaign, during which the company has been diligently collecting donations from customers to support various partner charities, ranging from hospitals to youth organizations and food banks. Interested individuals can find a list of participating restaurants and charity partners on Jersey Mike’s website.
Preparations for the Day of Giving are meticulous, with each Jersey Mike’s location beefing up its staff and stocking up on essential ingredients to meet the anticipated surge in demand. From meats and cheeses to fresh produce and bread, no detail is overlooked to ensure a seamless and successful event.
The mechanics of giving are straightforward: Every purchase made during the event each year, whether in-store, through the Jersey Mike’s app, or via third-party delivery services, contributes to the charitable fund. This includes not only subs but also accompanying items like chips, drinks, and catering orders.
Since its inception in 2011, Jersey Mike’s Month of Giving initiative has raised over $88 million for local charities.
At the end of last year, Cancro revealed ambitious growth plans for the sandwich chain, aiming to open 350 locations in 2024, followed by 400-450 in 2026, ultimately eyeing 10,000 stores. Despite previous success in meeting targets, Cancro emphasized a commitment to follow through on plans. The company’s recent growth spurt, amid the pandemic, saw average unit volumes soar to $1.35 million, driven by a focus on fresh ingredients and quality service. Jersey Mike’s invests heavily in employee training and community engagement, exemplified by its Annual Day of Giving, reflecting Cancro’s vision of sustained growth rooted in core values.
Discussion Questions
What lessons can other retailers draw from Jersey Mike’s Subs’ annual Month of Giving campaign in fostering brand loyalty, social impact, and long-term sustainability?
How does Jersey Mike’s Subs’ Month of Giving campaign go beyond philanthropy to strengthen brand loyalty and foster emotional connections with customers?
Amidst the growing focus on corporate social responsibility, how can businesses strike a balance between commercial goals and community engagement to make a lasting positive impact and stay competitive in fierce markets?
Poll
Loading …BrainTrust
David Biernbaum
Founder & President, David Biernbaum & Associates LLC
Verlin Youd
SVP Americas, Ariadne
Back in 2015, Subway’s US sales were 16.7x higher than Jersey Mike’s. Last year, Subway had US sales 5.1x higher than Jersey Mike’s. That’s still a big difference, but it underlines the fast pace of growth at Jersey Mike’s and how much ground it has gained on its rival. There are lots of reasons for this success: the focus on quality, very good customer service, a lot of customization options, strong marketing campaigns, and excellent support for franchisees. The online ordering system also works very well. By contrast, while still a good business overall, Subway has had a much tougher time adapting to changing consumer needs and has sometimes struggled to maintain consistency across its large restaurant network.
As for the Day of Giving: look, it’s important and it helps creates some goodwill and local visibility around the brand, but it’s very much icing on an already well-baked cake.
The article is a little skimpy on facts: such as that (sic) president setting Subway has 37K+ locations; IOW, there’s nearly a 14:1 size disparity…no, there won’t be much of a title challenge (for quite a while anyway). But, really, so what? One of the advantages of being relatively small is that there’s plenty of room to grow. And if they offer up what people want – enough people, anyway – they will. I’m not fond of using charitable giving as a promotional tool – I think it diminishes the very point of giving – but that’s really a small concern….munch on, Mike!
The question; can Jersey Mike’s challenge Subway, might be better asked in reverse. Subway is making efforts now to be more like Jersey Mike’s. So, who is challenging who?
Until now, Subway never sliced its meat, fresh. But now, we can find fresh meat slicers in some 20,000 stores in the U.S. The stores are using deli meat slicers for the first time, ever. In the past, al the meat had been sliced at some earlier point in time, and was simply forked or scooped out of the tubs behind the counter.
Subway invested $80 million in equipment to elevate its quality closer to Jersey Mike’s standards. Well, that’s probably a good thing, right? However, in reading customer reviews, it seems that Jersey Mike’s customers will not make the switch. Many are convinced that Jersey Mike’s is still significantly better.
I walked into a Subway myself and noticed a sign advertising the fresh sliced meat, and I noticed that the slicers were quite visible to customers, maybe even a bit more so than Jersey Mike’s. But Jersey Mike’s cuts freshly sliced for every customer, and it appears that Subway does not.
All considered, I believe Subway’s signs, the advertising, and the signs might elevate sales, at least for a while. Jersey Mike’s did Subway a favor by raising the standard, and no doubt, Subway has improved. Again, that’s a good thing, right?
In my opinion, Jersey Mike isn’t going to lose its own customers to Subway, even with the new slicers. Will Jersey Mike’s ever become as large as subway with as many stores? I highly doubt that but I’m not so sure that would be Jersey Mike’s objective. Like anything else, the premium brand will never be as large as the commodity brand. However, Jersey Mike’s might take some market share from Subway, especially for a premium market who in the past, chose Subway over McDonalds. – Db
I can remember the last time I was in a Subway. The meat had a pearly glaze. I walked out. That was a long time ago. I have never been to Jersey Mike’s. I assumed Jersey Mike’s was the same. Apparently, it isn’t.
I might try on their giving day.
Jersey Mike’s Day of Giving and presence during March Madness and MLB’s opening weekend will bring visibility and traffic. If they can execute on their brand promise they should be able to convert customers and gain market share.
Where is Subway’s month of giving? How does Subway promote more fresh and healthy components beyond its fresh cut meats? This is all that needs to be asked.
Full disclosure, Jersey Mike’s is my preferred provider of sandwiches, although still a fairly infrequent purchase. I find the quality – selection, taste, texture, experience, value – superior to the competition. That said, I was not aware of the Day of Giving. Had I been aware I would have probably purchased sandwiches that day as I like the idea of giving ALL sales from that day to charity and not just what is donated by customers, even with a match.
For the last few years, Jersey Mike’s has been more proactive in advertising across media, hitting messages that seem to matter to consumers and using easy-to-recognize and remember spokespeople (Danny DeVito). Combine good marketing with a superior product and you have a recipe for growth, especially when the largest competitor seems to be in full reactive versus proactive mode.
It seems the gauntlet is thrown and Subway has an opportunity to step up its game too!