Our beloved Brew.

Our beloved Brew.
R.I.P. Big guy.

Tuesday, April 2, 2013

Subway Takes A Bigger Bite Out of Your Wallet

As a frequent Subway customer, in a manner of speaking, I've been waiting for the other shoe to drop ever since the restaurant chain launched its "Five Dollar Footlong" campaign. I have to admit grabbing a filling 12-inch sandwich for a fin brought me in once or twice a week.

In the spirit of full disclosure, I frequently treated myself to my favorite and more expensive steak and cheese version. No need to tell you, unlike Jared, the Subway spokesperson, my weight steadily went up on this "diet."

The current Subway ad campaign is promoting a $3 six-inch version. Never having been good at math, even I know that means a footlong equivalent is now $6. Continuing on the rocky road of my math skills, that translate into a 20% price increase.

The truth is, Subway has actually enacted an across the board price increase but continues to offer a couple of loss leaders to mask the impact. That steak and cheese sandwich I loved just isn't worth almost $9 to me.

From the outset, I wondered about the logic of building equity in a pricing strategy with a slogan like "Five Dollar Footlongs" only to abandon it when conditions changed. While Subway is still trying to drive home a value message by suggesting in its ads that a single flavor 6-inch product is "still only $3" I don't think the public will soon forget there was a choice of many sandwich varieties for $5.

It will be interesting to see how this new pricing will impact the chain's comparable sales, average check and sandwich units sold.

Admittedly, I haven't stopped in to a Subway in the weeks since the pricing change and I doubt there's a direct correlation between that and my new lunchtime favorite, McDonald's Hot & Spicy Chicken sandwiches. At my local "Mickey D's" you get two of these gems, fries and a drink for under $5. Subway better hope its other customers aren't as reluctant to break the $5 barrier as I am.