Subway clocks double-digit same stores sales growth amid easing of Covid-19 challenges

KSA-based conglomerate KOJ Group and the master franchisee of the biggest American QSR brand looks to double the number of outlets to 250 in the UAE over the next five years

Joydeep Sengupta

Published: Tue 20 Sep 2022, 7:15 PM

Subway has reported a steady double-digit same store sales growth on the back of the raging Covid-19 pandemic, according to John Chidsey, chief executive officer, Subway.

Subway, which has wooed consumers across the globe with its signature submarine sandwiches, has overcome the raging Covid-19 challenges, despite the obvious constraints such as “lack of drive-through outlets in large parts of the world”.

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However, an affable Chidsey quickly tapped into an opportunity by concentrating on “ramping up a takeout business”.

Chidsey, former CEO of Burger King, who took over the reins of Subway in November 2019 and is visiting Dubai for the first time in over a decade in his new role. He is largely being credited with a turnaround of the legacy Quick Service Restaurant brand since the death its cofounder Fred DeLuca in 2015.

Earlier, Subway had leapfrogged industry giants such as McDonald’s in the new millennium.

“The results were evident overnight because of the nature of our trade, which is less labour intensive. We need only three workers as opposed to 15 by some of the other brands. Besides, our food travels much better and holds up against competition because of its freshness,” the CEO said.

An established brand

The Milford, Connecticut-headquartered company, became the largest fast-food chain in the US in 2002 and has over 21,000 stores in the North American country and more than 37,000 outlets in over 100 nations across the world.

“We launched a mobile application in the third quarter of 2020 amid the pandemic to boost its takeout service," Chidsey said.

The iconic American brand is on an expansion plea in Europe, Middle East and Africa (EMEA), according to Mike Kehoe, president, Middle East and Africa, Subway.

“We’re present in 50 countries in EMEA and there are over 6,500 stores. Add to that our Indian subcontinent, Saudi Arabia, Kuwait and Turkey, another 3,000 stores will be added to our bouquet by 2030,” Kehoe said.

“The brand’s exponential growth on the back of pandemic can largely be attributed to priorisation, convenience, food safety and hygiene, which struck a big chord with our loyal consumers and new customers such as zillennials,” he added.

GCC foray

Initially, Subway had made its international foray in the six-nation Gulf Cooperation Council region in Bahrain in 1987, followed by Saudi Arabia in 1993 and the UAE in 1998.

Kamal Osman Jamjoom, founder and chairman of the Saudi’s KOJ Group, weighed in on his expansion plans for the UAE.

“We’re bullish about Subway’s growth in the UAE because of the brand’s popularity among zillennials — Emiratis and expatriates alike,” he said.

Hisham Al Amoudi, CEO, KOJ, echoed Jamjoom.

“There were 124 stores in the UAE. On Tuesday, we opened the 90th store at Arjan in Dubai, which took the tally to 125 in the country. Plans are afoot to double that figure in the next five years. There will be a store for every 40,000-50,000 population in the UAE,” he said.

Brand’s roadmap

The KOJ CEO emphasised on the brand’s roadmap in the UAE.

“We’ve been conducting market research, which shows that our brand is strategically positioned in the most prominent commercial properties in the UAE. The menu is being tweaked for zillennials and there has been an upside in our business prospects,” he added.

Chidsey focused on the brand’s future and cited the focus years in a digitally-conscious world.

“Maintaining top line growth, health consciousness, less labour-intensive operations, overcoming technological challenges, efficient supply chain management, cyber security mechanisms and innovations are some of the key areas that can keep the legacy brand vibrant,” he said.

Jamjoom and Al Amoudi are clear about their localised vision for the brand.

“The Saudisation and Omanisation model must find an echo in the UAE as well. We’d like to see Emiratis trained in QSR operations as Emiratisation is the only way forward,” they added.

— joydeep@khaleejtimes.com