The Subway Decade

 
In the last ten years, Subway has launched a unique career in Europe. The American sandwich formula now has a presence in 29 European countries and, in the second half of February, will open its 3,000th outlet on the continent. Two locations at Moscow's airport and London's Dungeon Museum were competing for the title when this magazine went to press. The greatest challenges that management has had to face in the process have included the diversity of business practices and the culinary preferences of the Old World. Well developed markets such as Great Britain and Germany require different expansion strategies from those in newly entered territories like Eastern Europe.
 
Amongst the American fast-food chains that have established a foothold in Europe in the past decades, Subway definitely has a special place. Firstly, as a proprietorrun business, established 45 years ago by founder Fred DeLuca, and now operated entirely by franchisees. Secondly because of its special expansion principle, whereby independent ‘Development Agents' (DAs) are tasked with developing specific regions and with finding suitable franchisees. Thirdly as a result of their positioning as ‘healthy food' with ‘made-forme' appeal: there are some 15 versions of the ‘sub' (from ‘submarine' used in America for long, baguette-style sandwiches) and they come in two sizes; the sandwiches (five different kinds of bread) with their salad and fillings are prepared entirely to order in front of the customers.
 
Compared to the rapid rate of expansion in recent years, the launch of the system restaurants in the Old World began at a rather more leisurely pace. The first European Subway restaurant opened in 1995 in Vienna and in 1996 the first British outlet in Brighton joined the network - whilst the German launch took place in 1999 in Berlin. These were followed by Finland (2000), France (2001) and then, step by step, 29 of the 50 or so European states, including Israel. The extreme East of Russia must also be added to the list - recently the first of 100 outlets planned in the region was opened near the Japanese border. Frenchman Marc Kreder has been responsible for Subway's business there as European Director for one year now; previously, as head of operations in France, he had driven up the number of French sandwich stores from 9 to 150. The 3,000th milestone is for him only a staging post on the way to the longer-term goal of 9,000 outlets that he would like to achieve by 2015. Nevertheless just 15 years after they entered the market, the success story of these sandwich specialists in the Old World has been an impressive one: "We have almost 1,400 outlets in Great Britain, almost 800 in Germany and close to 200 in France," enumerates Kreder. "That is quite a lot, but when we look at the world we can still see a lot of potential for the European markets." With a population of 20 m in Australia there are 1,200 Subway outlets; in Puerto Rico, for less than 4 m inhabitants there are still 220 of them. Not to mention the USA, with nearly 23,000 locations for a population of 300 m. "Compared to that, we have a long way to go before we reach the limits of possible growth".
 
He is very willing to admit that expansion on a continent with lots of individual nations is not entirely easy: "We currently have a presence in 29 European countries - that means 25 different languages, 17 currencies, all the major world religions. That makes Europe a very complex challenge for Subway, but it also makes it fun. On top of that, every country has its own culinary traditions and eating habits and thinks that its own bread is the best."
 

 
| 19 February 2010 | Barbara Mecke |