Briefs for Wednesday
Subway Restaurants has sported the “Eat Fresh” slogan for years, even as it peddled limp tomatoes and processed deli meats.
Now, with new breads, smashed avocado and fresh mozzarella, the sandwich chain is trying to bring back the customers who’ve defected to more modern eateries like Jimmy John’s and Chipotle Mexican Grill Inc.
The closely held company on Tuesday announced what it calls the biggest changes ever in its more than half-a-century history.
Dubbed the “Eat Fresh Refresh,” Subway is rolling out two new bread recipes, several on-trend premium ingredients and a handful of new sandwiches, plus nationwide delivery service.
It’s hoping those changes will lure diners back to its stores after five straight years of declines. Skeptics of the brand say it won’t be so simple.
Subway is one of the most recognizable names in the restaurant industry, and its more than 22,000 U.S. locations makes it the largest by store count, dwarfing even McDonald’s Corp. But its massive size obscures a simple fact: American tastes have changed.
“Subway has sat on its laurels for so long; it’s kind of difficult to pull out of this hole,” said John Gordon, principal at Pacific Management Consulting Group. “The sales have fallen so much in the store.”
Although 2020 was a boom year for many fast-food rivals, fewer than one in 10 Subway stores has a drive-through, meaning it missed out on much of that low-contact demand.
The Subway app didn’t even offer delivery – it’s rolling that out this summer as part of the refresh.
The company closed 1,600 net locations in its home market last year as system sales tumbled 18%, according to Technomic data.
During the pandemic that upended the food-service industry, Subway’s sales depended largely on location, said Trevor Haynes, the chain’s head of North America.
losed stores at some hard-hit locations like colleges and airports have yet to reopen, he said, but overall sales are now “tracking up.”
Services growth slowed in June
SILVER SPRING, Md. – Growth in the services sector, where most Americans work, slowed in June following record expansion in May.
The Institute for Supply Management said Tuesday that its monthly survey of service industries retreated to a reading of 60.1, following a all-time high reading of 64 in May.
Any reading above 50 indicates the sector is expanding.
It’s the 13th straight month of expansion in the services sector following a two-month contraction in April and May of last year as businesses were forced to shut down during the early stages of the coronavirus pandemic.
After five consecutive months of expansion, the employment index fell into contraction territory in June with a reading of 49.3, down from May’s 55.3, suggesting many companies are still struggling to hire enough workers.
The Labor Department reported an encouraging burst of hiring in its jobs report last week, 850,000 jobs added in June, well above the average of the previous three months.
Hiring in June was particularly strong in restaurants, bars and hotels, which collectively absorbed heavier layoffs from the recession.
Those businesses added 343,000 jobs, but it may not be enough.
Comments from respondents continued to focus on supply chain issues, supply shortages and staffing difficulties.
“Manpower has been a concern,” said one; another commented: “Lack of labor is killing us.”
One group benefitting from the plentiful jobs is teenagers.
An acute labor shortage – especially at restaurants, tourism and entertainment businesses – has teenage workers in high demand.
Lifeguarding, bussing tables and other jobs are paying $15 to $17 or more in many places, luring young people into the workforce in numbers not seen since before the Great Recession.
The Labor Department says that 33.2% of Americans aged 16-19 are working, the highest percentage since 2008.
From wire reports