An increasing number of retailers are capitalising on the Subway brand in order to drive footfall and attract new customers to their stores.
Leading Welsh retailer Conrad Davies plans to open in-store Subway counters with seating in his Eurospar stores in Blaenau and Dolgellau this year. In December he opened a Subway restaurant above his Pwllheli store, which turns over £6,500 a week, nearly double expectations. “I reckon it’ll hit £10,000 at the height of the summer,” he added.
He said costs would be far less at the in-store Subway outlets as “there’s no extra lighting or heating to provide for in store, and the electricity bill would only be an extra £50 a week rather than £150 in Pwllheli, plus there’s no extra insurance”.
“It’s all about the brand,” he added. “I saw it with Costa Coffee when we introduced it in store.”
In Budgens Broadstairs, Kent, manager Adam Hogwood is hoping to open a Subway serve-over counter in the 2,300sq ft store, pending a decision from the bank. “It’s about brand strength,” he said. “When we installed a Costa Coffee machine coffee sales trebled on the previous Lavazza machine. It will bring a whole lot of new people into the store.”
He expects the Subway offer to generate associated purchases and plans to locate meal deal promotions near the counter to appeal to language school students and workers. He will also re-lay the store so customers have to walk through it to get to the Subway counter.
Nick Fraser, managing director of Fraser’s Budgens, has opened Subway counters in his two Budgens forecourt stores in Somerset and Oxfordshire, and in his Spar forecourt in Brize Norton, Oxfordshire. “It’s an additional brand and footfall driver,” he said. “And it doesn’t affect sandwich sales, which only dropped by 2% at Brize Norton, as the Subway shopper is a different type of customer.”
Nick turned to Subway after several unsuccessful attempts at offering hot food such as pizzas and fried chicken.
“We have to buy from their supplier partners, but they look after our margins very well as they negotiate on our behalf,” he added. “We buy better from them than we do through Budgens and Spar - even though we pay them a franchisee fee.”
Elsewhere, Blakemore Retail is planning to implement a dual brand Spar/Subway model in 20 sites over the course of the year.
Subway currently has more than 170 branches operating within c-stores or petrol forecourts, of which 50 opened last year. There are “many more in development in 2014”, the company said.