Foodservice

Sandwiched In

Differentiation, focused positioning drive strong sales in sandwich sector: Technomic
CHICAGO -- The Top 100 limited-service sandwich chains grew sales by 8.6% in 2008, to $20.3 billion, according to foodservice industry consulting firm Technomic. Gains were driven by industry leader Subway, with strong execution of its $5 foot-long promotion and value positioning resulting in a 17.1% increase in sales to $9.6 billion.

The Top 100 outperformed the limited-service sandwich industry as a whole, which posted sales of $22.6 billion systemwide, growing by 6.9%.

"The limited-service sandwich chains that continue to perform well have conveyed a strong value [image-nocss] equation to their customersfrom craveable flavor profiles to reasonable pricing to convenience of ordering," said Darren Tristano, executive vice president at Technomic, Chicago. "Given the challenging economic environment, leaders should understand the shifting expectations of their customers and be prepared to make the necessary changes to remain relevant, while keeping a watchful eye on margin erosion concerns."

The Top 100 sandwich chains grew units by 1.8% in 2008 to more than 39,000 locations, outperforming the sandwich category's growth of 1.4% and the total limited-service restaurant industry's unit increase of 0.6%. The total restaurant industry's units declined by 0.6% from 2007.

Subway led the sandwich industry in unit growth, adding 686 new locations in 2008. Atlanta-based Rising Roll Gourmet had the highest rate of growth at 71.4%, bringing its total to 12 units.

Menu trends among the Top 100 chains include use of flatbreads and premium ingredients, bolder flavor profiles, new hot panini-style sandwiches, healthier offerings and the use of natural, organic, local and sustainable sandwich components.

Chains continue to implement green initiatives to promote social responsibility, reduced energy costs and environmental protection.

Many quick-service operators are revamping to more upscale interiors to encourage customers to linger.

Operators are increasing their use of the Internet to reach customers through social media sites such as Facebook, YouTube and Twitter.

The findings are detailed in a new study from Technomic, the "2009 Top 100 Limited-Service Sandwich Chains Restaurant Report." Some of the trends, chains and products examined include Subway's value-driven menu strategy, Jason's Deli's healthy approach to sandwiches, Which Wich's customization, Jimmy John's promotion of convenience with delivery options and 'wichcraft's gourmet, high-quality menu positioning.

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