Subway will implement these changes to avoid more closures: 135 branches have lowered the curtain in Mexico and another 40 are at risk

The pandemic has caused the definitive closure of 15% of Subway Mexico branches in the last year, so the company is preparing a renewal of its menu and other changes to stay afloat.
Subway will implement these changes to avoid more closures: 135 branches have lowered the curtain in Mexico and another 40 are at risk
Image credit: Subway vía Twitter

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Entrepreneur Staff
5 min read
This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

'Renew or die' seems to be the new mantra of Subway Mexico , which plans to make changes to its menu to avoid the closure of more branches. In the last year, the fast food chain permanently closed 135 of the 887 stores it had in our country before the Covid-19 pandemic . Another 40 units remain temporarily closed, but are at risk of disappearing.

A market study carried out by Subway in Querétaro revealed that in the branches where they included new dishes , sales grew 4.4% . The integration of options, such as its new sandwich with boneless chicken and wing sauce, also resulted in a 2% increase in traffic and a 2.9% increase in the average ticket .

“Part of the strategy is to bring new things now, and not be left standing because all this happened (the pandemic). You have to continue reinventing yourself and also be in new modalities of accessibility with the client, ” said José Villarreal, CEO of Subway Mexico, as quoted by El Financiero .

Changes in Subway's sales scheme

The manager announced that they plan to implement a loyalty program towards the end of this year and will soon launch an app so that consumers can place orders and only go to the store to pick them up without contact.

They also plan to increase the number of stores with drive thru service. For now, only six units have a car service scheme and they want to reach 52 this year.

The pandemic put on pause the remodeling of restaurants to the Fresh Forward concept, announced in 2018 and which they planned to conclude in three years. For now, only 42 branches made the change, which includes offering a digital menu and WiFi connection , as well as changing the distribution within the stores.

"We are expecting. We continue with the plan to be able to do so. What we did work very hard on was to make the elements that make up that remodeling more flexible and look for supplies and local suppliers, so that some things that we had to be importing to complete that image we could do here, under the same standards ” , declared the CEO according to Expansión . He also explained that betting on local suppliers meant a saving of between 26% and 30% of the initial investment.

Door-to-door orders have helped Subway survive

As a result of the confinements, in 2020 the sales of restaurants through digital home delivery platforms had strong growth, including Subway.

In the last year, the chain received 107% more orders than in 2019, which translated into a 128% increase in its sales . For now, some units have sales levels of up to 80%, compared to the year before the pandemic. However, Villareal sees possible that this 2021 will go down.

“The increase in traffic from the home delivery side has not been enough to compensate for the loss we had at the restaurant. It has helped and we know that it is here to stay, that is why we are betting on these remote order projects and other ideas that we bring that will be very friendly and non-contact ” , said the CEO of Subway Mexico.

Subway is reluctant to lower the curtain

Most of the permanently closed premises were located within a shopping center and it was impossible for them to cover operating costs, such as rent. The strongest impact was in Mexico City, where more restaurants were concentrated.

About 300 people were unemployed as a result of the closures, with an average of 8 employees working at each Subway restaurant. Villarreal said the company tried to relocate workers to other units, but did not specify the number of rehires or lost jobs.

Currently the fast food chain has 752 branches in operation , a figure that includes stores that are on the tightrope. However, despite the efforts, the company seems resigned that they will not be able to save them all.

"Of the 40 that are temporarily closed, we want half of them not to end up closing, like others, who could not bear the situation with all the payments for rent, electricity, water, salaries ," Villarreal told the same media.

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