Subway is battling a public relations nightmare.
Jared Fogle, the brand’s pitchman for the last 15 years, has been charged with possessing child pornography and paying for sex with minors. He plans to plead guilty to the crimes.
Fogle was one of Subway’s most lucrative spokesmen, reportedly contributing to nearly half of Subway’s growth over the last 15 years — since he became famous for losing more than 200 pounds while eating the restaurant’s sandwiches.
Subway cut ties with him last month following an FBI raid on his Zionsville, Indiana home.
But the company’s troubles are far from over.
With or without Fogle, the ubiquitous sandwich chain is suffering a disturbing sales decline.
Subway’s sales dropped 3% last year to $US11.9 billion, despite opening 778 new stores, according to QSR magazine.
The decline was steeper than for any other of America’s top 25 food chains last year, according to the Washington Post. The chain’s performance was worse than even struggling McDonald’s, which saw US sales decline 2.2% last year.
So what went wrong?
Subway rose to become one of the biggest restaurant chains in the world with more than 43,000 outlets globally by advertising a healthier, fresh alternative to traditional fast food like McDonald’s and Burger King.
Subway was a pioneer in made-to-order sandwiches, prepared right in front of customers by employees taking orders in an assembly-line fashion.
But then other rivals, such as Chipotle and Panera, started offering even fresher options — like antibiotic-free meats and additive-free guacamole prepared on site.
According to analysts, Subway didn’t evolve quickly enough to meet diners’ changing ideas about what is considered fresh and healthy.
As a result, the chain is facing an eroding public perception regarding the quality of its food. Subway did not respond to a request for comment on this story.
Subway’s public image was hit particularly hard last year when FoodBabe.com blogger Vani Hari launched an online campaign against the chain for using the additive azodicarbonamide in its bread.
The campaign was successful, and Subway was forced to change the recipe for its bread as a result.
Now Subway is committing to remove all artificial flavours, colours, and preservatives from its food over the next two years.
It remains to be seen whether any of these changes will actually improve Subway’s reputation.
But things aren’t looking great for the sub chain.
“We’re in a new environment — the Chipotle environment . . . the fast-casual environment — with a new type of rhetoric, quality and marketability,” Andrew Alvarez, a food analyst with IBISWorld, told the Post. By comparison, “Subway’s platform, its presentation almost looks primordial.”
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