Subway’s Quest to Reclaim Customer Momentum: Leading with ‘Better for You’

 

As fast food continues to be dominated by price wars and value-driven menus, Subway finds itself on a different path, relying on its foundational “better for you” brand promise according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

For decades, Subway positioned itself as the go-to fast-food option for health-conscious diners, offering customizable, veggie-packed sandwiches and emphasizing freshness over fried. However, regaining momentum in the fast-food market while remaining profitable is no small feat, especially when competitors aggressively leverage pricing to attract legacy customers.

The Core of Subway's "Better for You" Promise

Subway's branding has long revolved around three key aspects:

1.       Customizable options, allowing healthier ingredient choices.

2.       Nutritional transparency, promoting calorie-conscious dining.

3.       Wide availability of fresh produce and lean proteins compared to fried or highly processed alternatives.

While these traits resonate with a portion of consumers, they face pressure to remain affordable in a marketplace driven increasingly by “2 for $5” and other low-price offerings. Competitors are banking on perceived value and volume rather than a niche health positioning to bolster unit sales.

The Challenges: Why Boosting Profits Without New Customers Is Tough

Subway faces a unique set of challenges in its pursuit of higher profitability:

1.       Limited Pricing Flexibility
Subway’s brand is historically tied to affordability, with its $5 Footlong campaign once becoming a cultural phenomenon. Introducing higher-priced menu items risks alienating core customers while failing to attract new ones.

2.       Customer Migration to Competitors
With a portion of consumers opting for bundled deals like McDonald’s Extra Value Meals or Taco Bell’s Cravings Box, Subway’s focus on premium options leaves it vulnerable to losing value-seekers entirely.

3.       Dependence on Loyalty Without Innovation
Without new menu innovations or unique offerings, Subway risks relying on a declining loyal customer base that increasingly demands exciting and diverse flavors.

4.       Operational Efficiency vs. Ingredient Quality
Higher ingredient costs for premium, fresh items can limit profits, particularly without streamlined operations to offset expenses.

Competitors’ Strategies: Leveraging Price to Gain Legacy Customers

Subway’s competitors, particularly McDonald's, Taco Bell, and Wendy’s, are thriving on value-driven campaigns that attract both budget-conscious diners and volume sales:

1.       Bundling and Meal Deals
Competitors frequently roll out family-sized value meals or dollar menu items, encouraging customers to buy more. For example, Wendy’s 4 for $4 has created a loyal following, building traffic in-store and online.

2.       Limited-Time Promotions
Leveraging promotions like McDonald's Famous Orders campaigns, competitors create buzz while keeping prices approachable, creating a fear-of-missing-out (FOMO) effect that drives in-store traffic.

3.       Tech-Driven Value Perception
Mobile apps offer exclusive discounts and rewards, gamifying value-driven eating in ways that Subway has yet to master fully.

4.       Breadth of Menu
Diversified offerings, such as Taco Bell’s variety of nacho boxes or McDonald's mix-and-match deals, ensure repeat visits while staying wallet-friendly.

What Subway Can Do to Stay Relevant

To compete effectively, Subway must amplify its “better for you” message while finding creative ways to appeal to value-conscious consumers without devaluing its brand. Possible strategies include:

·         Offering “Better for You Bundles” with a balanced mix of nutrient-packed sandwiches, sides, and drinks.

·         Introducing Tiered Rewards in loyalty programs to incentivize frequent purchases.

·         Doubling Down on Localized Innovations that offer regional or culturally relevant menu items, leveraging mix-and-match options.

·         Enhancing Tech Integration by personalizing deals based on ordering history, further targeting customer needs.

Subway’s challenge is one of balancing its heritage and profit margins. By evolving its model with smarter pricing, innovation, and a tech-enabled customer focus, the chain may yet regain its stride without abandoning the principles that made it a household name.

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information. 

Evolution of Wendy's Breakfast Strategy as a Disruptor

 

While Wendy’s previously struggled to define itself in the early-morning crowd, the company finally broke the mold with a multi-pronged marketing and operational strategy according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Let’s take a look:

1.       A Simple Yet Compelling Menu
Wendy’s focused on aligning its breakfast offerings with its broader brand identity—quality ingredients and freshly prepared food. Signature items like the Breakfast Baconator and Frosty-ccino bridged the gap between familiar Wendy’s lunch/dinner favorites and new, craveable breakfast options.

2.       Marketing Precision
Wendy’s spent over $90 million to promote its breakfast launch in 2020. Leveraging humor and cheeky comparisons to competitors (like McDonald’s iconic breakfast items), the campaigns resonated with younger audiences looking for an alternative.

3.       Operational Overhaul
Learning from prior breakfast failures, Wendy’s implemented standardized operations, emphasizing speed and freshness, which addressed traditional hurdles in staffing and food preparation at the crack of dawn.

Key Metrics Driving Success

In its first year, Wendy’s breakfast sales accounted for roughly 7–8% of systemwide sales, exceeding initial projections. By 2022, breakfast represented nearly 10% of its sales, putting it on a trajectory to rival established players in the breakfast arena. Furthermore:

·         Breakfast sandwiches like the Maple Bacon Croissant outperformed legacy breakfast items at competitors, with industry analysts highlighting its strong flavor profile as a disruptor.

·         Drive-thru innovations—such as app-based preorders and partnerships with delivery platforms like DoorDash—enabled breakfast to reach a wider audience amid a shift to remote work environments.

How Wendy’s Positioned Itself for Long-Term Breakfast Success

Consumer Touchpoints that Resonate:

1.       Flavor First: By positioning their breakfast offerings as bold and indulgent, Wendy’s appeals to younger consumers craving indulgence during a traditionally "simple" meal.

2.       Fresh is Best: Leveraging its “Fresh, Never Frozen” beef slogan carried over into freshly cracked eggs and made-to-order sandwiches.

3.       Value + Convenience: Offering breakfast deals, including $3 combos, effectively challenged McDonald’s value breakfast items without eroding its premium image.

4.       Tech and Delivery Focus: As consumer behaviors shifted to app ordering and delivery, Wendy’s ensured breakfast could be part of the mix, even on hybrid work-from-home schedules.

Disrupting Foodservice: Where Will Wendy’s Be in Two Years?

Wendy’s breakfast success is a key component of its overall growth strategy, but its positioning has broader implications for the foodservice sector:

1.       Elevating Breakfast’s Premium Appeal
In two years, Wendy’s could emerge as the dominant premium breakfast destination, particularly among millennial and Gen Z diners, who value flavor innovation and digital convenience.

2.       Expanding the "Brunch-ification" Trend
Wendy’s ability to blend traditional breakfast offerings with indulgent, mid-day menu items could expand its menu versatility, establishing its breakfast hour as a destination for mid-morning meals and informal brunches.

3.       Challenging Established Breakfast Leaders
By continuing to invest in marketing that plays up its competitive edge in flavor and quality, Wendy’s could threaten the dominance of McDonald’s and Dunkin’ in the breakfast space. Experts suggest Wendy’s breakfast sales could reach 15–18% of systemwide sales by 2026 if momentum persists.

Think About This

Wendy’s deliberate and data-driven entry into the breakfast daypart has not only revitalized the segment but positioned the brand as a potential foodservice disruptor. With sustained innovation, marketing muscle, and tech-driven convenience, Wendy’s breakfast could not only solidify itself as a mainstay but also define breakfast's future for the quick-service industry. The breakfast Baconator’s rise, coupled with bold marketing campaigns, highlights Wendy’s shift from contender to potential leader—and in two years, its disruptor status may turn into category dominance.

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869

Applebee’s Winning Fast-Food Customers

 

As inflation continues to squeeze household budgets, Applebee’s is making strategic moves to capture fast-food customers looking for comfort, value, and a real dining experience according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

In the face of rising competition, the casual dining chain is doubling down on the price-value relationship in consumers' minds. With its new $9.99 Really Big Meal Deal featuring all-you-can-eat fries and bottomless beverages, Applebee’s is blending affordability with generosity, taking on the fast-food giants at their own game while emphasizing the unique advantages of sit-down dining.

The Price-Value Relationship

Applebee’s leadership has smartly recognized that the value proposition is central to the modern consumer. Amid an environment where a fast-food burger combo can easily exceed $12, the $9.99 price point of the Really Big Meal Deal stands out. Customers can choose a hearty burger or chicken sandwich paired with all-you-can-eat fries and endless soft drinks—a level of abundance that outstrips standard fast-food offers.

Applebee’s President, Tony Moralejo, underscored this during a recent interview on Yahoo Finance’s Asking for a Trend:

“The best value meal in America just got even better.”

Indeed, the shift from transactional drive-thru dining to the value-laden sit-down meal strikes a chord with families balancing budgets while wanting a more meaningful experience. Unlike most fast-food restaurants, Applebee’s provides an environment where families can relax, sit together, and enjoy a meal served by a real person instead of a robotic ordering screen or an app.

Success Clue

Understand Who is Your Customer 

Comfort Dining Meets Affordable Indulgence

While fast-food chains compete on speed and convenience, Applebee’s offers something distinct: a comfortable dining experience with perks that enhance perceived value. The Really Big Meal Deal builds on this advantage:

·         Family Dining: Applebee’s cozy booths and inviting atmosphere create a setting for families to connect over a meal without feeling rushed.

·         All-You-Can-Eat Perks: Endless fries and free drink refills add an element of indulgence that’s hard to find at quick-service outlets.

·         Customer-Centric Service: A friendly server, attentive to diners’ needs, delivers a personal touch absent from the fast-food assembly line.

This combination resonates particularly well in challenging economic times, where consumers are seeking more than just calories for their dollar—they want value that feels abundant and personal.

Value Wars Heating Up

Applebee’s $9.99 offering arrives in the midst of a fierce value battle with rival Chili’s, whose $10.99 3 for Me menu has been making waves. Chili’s offers bottomless chips and salsa as part of its bundle, but Applebee’s counter is clear:

“Salsa and chips, it’s filler, right?” said Moralejo, highlighting the substantiality of the fries-and-drink combination.

Applebee’s value-forward initiative aligns well with trends seen in the restaurant industry, where brands capitalizing on perceived abundance are winning. Consumers are comparing not just price tags, but also portion sizes, perceived quality, and the total dining experience.

Navigating Risks of Value Promotions

While free food promotions like Red Lobster’s infamous “Endless Shrimp” promotion have proven disastrous for profit margins, Applebee’s approach appears more calculated. Fries and soft drinks have low food costs compared to proteins, allowing the chain to balance profitability with perceived value. Franchisees, too, have reportedly supported the program’s extension past its initial month-long run, signaling operational confidence.

By providing satisfying portions with its new deal, Applebee’s also keeps diners longer, potentially boosting appetizer and dessert sales and, in turn, increasing the check average.

Think About this: Strength in Real Connections

Applebee’s is winning over fast-food customers by emphasizing the unique advantages of casual dining—comfort, quality service, and abundant value. The Really Big Meal Deal taps into price-conscious consumers’ need for indulgence without guilt and families’ desire for connection. In a world where fast food is dominated by convenience and automation, Applebee’s has carved out a niche: affordable meals served with human warmth in an inviting atmosphere.

This effort is more than a tactical promotion. It’s a strategy that repositions Applebee’s as a competitive option in both the casual-dining and fast-food categories, appealing to diners who don’t just want to eat—they want to belong.

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may the clue you need to propel your continued success

The Evolution of Chain Restaurant Menus: Reviving, Innovating, and Updating for Multigenerational Appeal

 

Chain restaurants are at the crossroads of menu evolution according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, where nostalgia meets novelty and reinvention drives relevance.

With a focus on catering to Gen Z, Millennials, and Baby Boomers, restaurants face the challenge of balancing the revival of old favorites, the introduction of new items, and updates to classic offerings. Each generation reacts differently, and understanding these nuances is essential for driving long-term top-line sales and bottom-line profits.

1. Bringing Back an Old Menu Item

The Appeal: Nostalgia sells. Reviving an old menu item taps into fond memories and creates a buzz among loyal customers. For Baby Boomers, it evokes a sense of comfort and familiarity. Millennials often see it as a connection to their youth, while Gen Z views it as a retro novelty worth trying.

Example: When Taco Bell reintroduced its Mexican Pizza, the response was overwhelming, especially from Millennials who grew up enjoying the item. Social media campaigns amplified its return, appealing to Gen Z's desire for shareable experiences.

Key Insights:

·         Baby Boomers value the consistency and trust built over years.

·         Millennials respond to the emotional pull and nostalgia.

·         Gen Z engages when the comeback is trendy and well-marketed.

Best Practices: Leverage storytelling to emphasize the item’s history while modernizing its presentation to appeal to younger generations. Limited-time offers (LTOs) can test market response and create urgency.

 

2. Introducing a New Menu Item

The Appeal: New items signal innovation and the promise of fresh experiences. For Gen Z, novelty often equals excitement, and they’re more willing to experiment. Millennials, while open to new items, prioritize health-conscious and sustainable choices. Baby Boomers tend to be cautious, looking for items that align with their tastes.

Example: McDonald’s successfully launched its plant-based McPlant burger to capture Millennials’ and Gen Z’s growing interest in plant-based diets. The initiative demonstrated how innovation aligned with health and environmental trends.

Key Insights:

·         Gen Z loves bold flavors and unique combinations.

·         Millennials appreciate items that align with lifestyle trends.

·         Baby Boomers prefer subtle changes that don’t stray too far from the familiar.

Best Practices: Highlight unique ingredients and social impact when launching new items. Engage customers through digital campaigns, influencer partnerships, and immersive in-store experiences.

 

3. Updating an Old Menu Item

The Appeal: Updating a classic item bridges the gap between nostalgia and modern preferences. Gen Z appreciates the fresh take, Millennials see it as an evolution of their favorites, and Baby Boomers value improved quality or health-conscious adjustments.

Example: Dominos improved its pizza recipe in 2010, addressing customer feedback and successfully revamping its core product. The updated recipe appealed across generations, boosting the brand’s reputation and sales.

Key Insights:

·         Gen Z views updates as a creative twist.

·         Millennials appreciate when updates add value without losing the essence.

·         Baby Boomers prioritize enhancements that maintain familiarity while improving taste or quality.

Best Practices: Use customer feedback to inform changes and transparently communicate improvements. Offering a side-by-side comparison can reassure skeptics and build trust.

 

What Works Best for Long-Term Success?

1.       Customer-Centric Strategy: Success hinges on understanding each generation’s values. Chain restaurants that listen to their customers and adapt accordingly can create menu offerings that resonate broadly.

2.       Balance and Variety: A mix of revived classics, innovative items, and updated favorites ensures there’s something for everyone. For instance, a core menu item can anchor the menu, while seasonal LTOs drive excitement and repeat visits.

3.       Marketing and Engagement: Effective marketing strategies, particularly on digital and social platforms, amplify menu changes. Interactive campaigns—such as allowing customers to vote for the next revived item—foster a sense of ownership and engagement.

Think About This: Reviving old favorites, launching new creations, and updating classics are powerful strategies for menu development. When tailored to the preferences of Gen Z, Millennials, and Baby Boomers, these approaches create a dynamic menu that drives both emotional connection and financial performance. By blending nostalgia with innovation and leveraging data-driven insights, chain restaurants can build lasting relationships with multigenerational audiences while securing their position in the competitive dining landscape.

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter