Subway becomes the latest to leave fans in shock as the food company announces the abrupt end to its $6.99 Meal Deal promotion, which only started on November 3, 2024. The deal had been set to run through late December but has been pulled mere weeks after its launch date-a reflection of the battle this fast-food chain and many others are fighting today. This article explains the reasons behind the early termination, the new promotional strategy that Subway is adopting, and what this means for customers.
Backdrop of the Subways Meal Deal for $6.99
Designed to be a value that appeals to its customers, the $6.99 Meal Deal allows customers to choose from any chef-crafted or custom six-inch sub, a small fountain drink, and a side of chips or two regular cookies. The goal is also intended to drive traffic and improve bottom lines as most consumers seek dining deals while groceries become more expensive.
While it was a darling of expectation, the Meal Deal disappointed expectations on the whole in terms of total sales and profitability. Indeed, according to internal messages between officials at Subway, while the promotion was able to reach satisfactory numbers of daily redemptions when being market-tested, its national roll-out did not result in the success that was anticipated.
Why the early kill?
There were a number of different reasons why Subway killed the $6.99 Meal Deal early:
- Sales performance: It did not live up to its expectation of generating high traffic and sales for Subway. While it performed well in the test markets, these could not scale up well across locations.
- Franchisee response: Management also took feedback from franchisees, who said that such deals were not profitable for them. Franchisees already have thin margins as costs are rising with increasing operational costs and other competitive fast-food chains.
- Market conditions: The fast food business is evolving with changing consumer taste and purchase habits affected by inflation. Many chains have been moving their promotional sets to get competitive in an environment in which value offers are getting popular.
Given such a challenge, Subway opted for the removal of the Meal Deal effective November 27, 2024, in-store orders but kept digital order type through December 26.
New promotional strategy
As Subway moves away from the now-shelved Meal Deal, it is pinning its hopes on a digital promotion, offering customers 20% off any sub. The offer starts on November 27 and runs until January 5, 2025. Such an action reflects Subway’s drive for continued evolution of its offers by consumer demand and market condition.
Subway said its approach to value is strategic and data-driven, driven by trying to hit that delicate balance between consumer needs and franchisee profitability by constantly testing new promotions and making changes where appropriate. In a statement, Subway said, “We take feedback seriously and sometimes that means pivoting quickly when necessary.”
The larger scourge of fast-food promotions
This puts Subway in step with broader actions under way at a number of fast feeders, which have in turn stepped up value-driven promotions, partly as consumers express general displeasure with the increasingly costly goods and services. Rivals including McDonald’s have introduced fresh lower-budget platforms amid similar market imperatives.
However, of these, value promotions are the most contentious among franchisees who have to make sure such deals do not drill holes in their profitability. Meanwhile, standardized pricing further complicates this for operators in high-cost markets who are already grappling with low unit volumes along with declining sales. Since 2015, Subway has closed about 7,000 locations in the United States alone, indicating current challenges within the brand.
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