, Australia

Subway is adding non-traditional locations to its brand transformation mix

ANZ country director Geoff Cockerill explains why singular restaurant formats are no longer an option moving forward.

Smaller footprints and “non-traditional” locations such as service stations and stadiums are on the menu for the country’s largest restaurant chain, partly in anticipation of more age groups embracing delivery technology.

Subway Australia and New Zealand country director Geoff Cockerill told QSR Media that they are exploring such formats to grow the business — having learned from similar models in Asia — amidst an ongoing remodeling of their 1,300-plus store network.

40% of these stores are planned to be “transformed” by the end of the year.

“What that may mean to some of those smaller footprints here is increased deliveries,” he said. “We'll have to look at how to make that work here. Because traditionally, we can get past that with the larger restaurants.”

Additional CBD stores are potentially on the table, Cockerill said, despite being one of the hardest hit areas by the pandemic.

“We’re working very closely with the landlords to ensure that we're getting good outcomes for our franchisees in that area,” he said.

Value push via delivery channels
Delivery’s increased role in Subway’s own COVID-19 experience is a clear factor in the chain’s move to go beyond their traditional site formats. During the height of last year’s restrictions, Subway bolstered its delivery front by partnering with DoorDash and Deliveroo.

Reflecting on the chain’s experience, Cockerill anticipates the industry to further embrace the channel, a sentiment much echoed by executives and experts alike.

“Pre-COVID, there may have been some age groups that were not using the technology. Now, we're finding that [the] age group [using delivery] has really broadened. That's the key opportunity,” he explained.

“There are just so many good opportunities and good value offerings right across delivery networks now so we need to stay abreast of that because our guests are a lot more cluey in that area.”

Products typically bought during traditional dayparts moved across when ordered via delivery, Cockerill revealed, citing its working customer base in “different environments.” The chain’s ongoing trial of a 24-hour pickup or delivery window in Brisbane — set for a wider rollout in the future — was done to address this trend.

Subway ANZ country director Geoff Cockerill anticipates the industry to further embrace the delivery channel. Photo: Supplied

Snacking still a big opportunity
Subway is also looking to drive growth with affordable options, observing that customers are seeking more value options. The snacking daypart, Cockerill said, remains a big market for the chain but stressed they will also continue to grow their lunch segment.

“People are going back to their traditional products, but they are looking for innovation. There's no doubt,” he said, referring to their new spicy mayo and large wraps.

Cockerill, who’s approaching his third year with the sandwich chain, said the brand is performing close to where it was in 2019.

“One of the things we learned is that it's very important to stay close to our franchisees; we had a lot of COVID[-related] communication, a lot of operational communication and a lot of general sales information on how to help them improve their profitability,” he shared.

Over the next two years, he said the brand will focus on opportunities to improve the customer experience, regardless of challenges ahead.

“We can't control whatever COVID will throw at us. But what we know is we've got really strong momentum. Our investment decisions from two or three years ago in technology and development have put us in a good place,” he said. “We're just feeling really positive about this year and beyond.”

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