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Great Development Ahead

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Subway’s rise in Europe continues. The sandwich brand is especially -expanding at great speed in Russia, Great Britain, and France. Marc -Kreder, Regional Director of Subway Europe, attributes the speedy growth to the brand’s great popularity among consumers,“More and more customers are asking us to open more stores.” In 2013, total sales for Subway in Europe reached US$2.030 bn (+16.7%). Like-for-like sales went up by 2%. Best sales growth was achieved in Norway (+15% like for like), Germany (+ 6%) and UK (+4%)

After 158 net new openings in the course of 2013, Russia is now the second largest Subway market in Europe. “In Russia, our growth is based on a Master Franchise Agreement: Our partners have set up a large organisation and have extensively opened stores mainly but not only in Moscow and ,” Kreder explains. “Here, Subway is by now the most developed quickservice chain in the industry.” From his point of view, the market is far from being satur-ated, “As store density per capita remains very low, we expect great major growth to come in the years ahead.” He forecasts 200 new store openings in Russia for 2014.

With over 1,600 units, Great Britain is Subway’s largest European market. Here, the company focus has meanwhile shifted to non-traditional locations: in the past three years, 200 new outlets were opened at airports, filling stations, universities and train stations. Kreder comments,“We will continue to gain momentum here as we partner with several key players willing to continue and reinforce our successful business together”.

Kreder’s home country France is now completely contracted to Development Agents, traditionally responsible for Subway’s expansion in new markets. “We signed the last two contracts in 2013,” Kreder reveals. “Several territories have been booming, particularly Paris and its suburbs, the French Riviera, and other big cities.” Furthermore, the first stores were opened at motorway locations as well as two drive-thru formats.

Kreder is also quite happy with the brand’s development in the Netherlands and the Nordic countries. “We have massive demand over there from consumers who don’t have a Subway restaurant close by. And there is still a lot of room for expansion at non-traditional locations and with drive-thrus, too. By the end of 2014, we plan to have multiplied by eight the number of drive-thrus there.”

In the rather challenging market Germany, where in recent years brand reputation dropped to an all-time low and more than 100 stores had to be closed, the turn-around seems to have been accomplished. The consolidation of franchise partnerships and concentrated investment into operational quality and marketing lead to an above-average rise in same store sales compared to the overall fast-food industry in 2013.

Kreder is optimistic that the number of stores in Germany will soon grow again,“Customer satisfaction and visits are continuously growing and convincing us to open more stores.“ In order to meet customer demands, Subway also asks consumers in other European countries about their expectations. “We deliver with a massive focus on store operations, training and value for money,“ says Kreder. “As a consequence we have more and more applicants hoping to become a Subway franchisee – we received no less than 50,000 applications last year!”