Subway says it had a record-setting year for sales in 2022, bolstered by a major menu revamp and store renovations. The company believes its plan to slice meat in front of customers could make 2023 another record year.
A privately held company, Subway doesn’t typically release quarterly earnings but it gave reporters a glimpse of its finances as the company potentially explores a sale. Sales at its North America stores open at least a year rose 7.8% last year compared to 2021, which Subway said exceeded its projections by more than $700 million (it didn’t reveal specific numbers).
“It was another great year for us in our transformation journey,” Subway CEO John Chidsey told CNN. “The momentum that was created in 2021, we maintained in 2022 and we’re off to a great start in 2023.”
Chidsey had no comment on a possible sale of Subway, reported by the Wall Street Journal last month, which could value the fast food giant at more than $10 billion.
Digital growth was also a highlight for the company, with sales made through its app or third-party services doubling compared to 2021. Its international footprint also grew with more than 750 restaurants opening last year, helping its global same-store sales grow 9.2% year over year.
Last July, Subway unveiled its most extensive makeover in the company’s nearly 60-year history that placed less of an emphasis on customization. Sales from its “Subway Series” menu now account for 20% of sales, Chidsey said. He said that the new sandwich combinations are a “win win” for its workers and franchisees because it’s easier.
“We’ll never walk away from customization because that’s how Subway is built, but I can see down the road we could be at 40% to 50% in terms of ‘Subway Series’ sales,’ he said.
Renovations remain a focus for the brand, with about half of its roughly 20,000 restaurants in the United States remodeled. This year, another 3,600 will be remodeled.
Subway is continuing its international expansion, relaunching its loyalty program and Chidsey teased another menu makeover this summer that will be “all about crave.” He declined to give further details.
However, what Chidsey might be most excited about its new meat slicers that will roll out at all of its stores. Restaurants will now slice the meat in front of guests, a reversal from its previous method of shipping locations pre-sliced meat.
“We were one of the few, if only, sub shop that didn’t slice in restaurant. Not only does it give the guest a better perception of seeing the nice, fluffy meat, but we save a lot of money since we were paying a lot of money to have it sliced upstream,” he said. The cost savings will be reinvested into the upcoming menu changes.