Subway’s Woes?

There are concerns that Subway’s growth strategy may be impacting the company’s ability to grow. In the last two years, the brand has shuttered nearly 1,000 locations each year.

One of the primary complaints is that the push to expand too quickly has led to an overabundance of stores and shrinking sales and success on a per-store basis. We dug into the numbers to analyze the situation.

Steady and Sustained Interest

Subway has been remarkably steady since the beginning of 2017 with visits showing a high level of consistency. Analyzing average monthly visits for January through September shows that Subway experienced a loss of about 0.7% in traffic from 2017 to 2018, before seeing a rise of 1.0% in 2019. This speaks to a brand that is continuing to deliver on a very steady rate.

Seasonality’s Growth Opportunity?

Yet, what makes this all the more interesting, is the high level of seasonality the brand experiences. Subway sees a significant winter dip before rebounding in the spring. March consistently sees a peak with 2018 and 2019 traffic jumping 7.4% and 5.7% above the baseline respectively for the period between January 2017 and September 2019. Traffic then drops heading into April – likely as a result of the Easter holiday before sustaining traffic until September when traffic decreases through the winter.

The bright side for 2019, is that the summer peak was higher than normal. July and August traffic were 10.2% and 5.9% above the baseline for the period, beating out the 3.4% and 4.4% peaks in those same months in 2018.

And this speaks to the tremendous opportunity. For Subway, there is a powerful chance to further optimize the value of each location by identifying ways to reverse the seasonal trends that limit impact. Whether it be a more winter focused menu or special promotions, there is a huge opportunity to maximize in-store success on a per-store basis.

Expansion Woes

But it is also clear that the concerns about overexpansion leading to cannibalization are very real. We analyzed two Subway locations in Richmond Virginia and found a significant overlap of audiences.  Either location could likely serve the bulk of this area, but instead, they actively compete with each other. What’s worse is that there are at least two other locations in close proximity, further exacerbating the problem.


Subway is doing great. Visit rates are steady even with large scale closures, indicating that satisfaction with the brand is still very high. That said, there are real signs that the push to expand via locations may be backfiring. The emphasis on new stores looks to be creating a cannibalization problem that is limiting the full effect of each store.

Instead, taking a more targeted approach to expansion may help push the brand into new markets with maximum impact. Additionally, a huge area of potential exists if the brand can help fight off the seasonal dip in the winter. The result of such a move could potentially drive significant visit increases during one of the few weaker periods for Subway. 

Will Subway begin to adapt? Visit and check out our data to find out.

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