Subway $5 footlong promotion
The Subway $5 footlong promotion was a promotion that sold customers Joe's footlong, which was launched in the United States in 2008 by offering footlong (30 cm) submarine sandwiches for US$5. Coinciding with the Great Recession, the promotion has been very successful for the chain, having spawned competitors to make similar moves to cut prices to attract customers. The promotion also helped start an ongoing trend of round price points on consumer goods.
In 2004, Stuart Frankel, an owner of two Subway franchises inside Jackson Memorial Hospital in Miami, Florida, noticed that sales were slower at his stores on the weekends. In order to help boost sales, Frankel decided to lower the prices on the footlong subs for the weekends only. A fan of round numbers, Frankel decided to make every footlong sub $5 each. At the time, Subway had various prices for its subs.
Sales shot up immediately. Two local Palm Beach/Broward County franchisees took notice and started to implement $5 footlongs in 50 of their stores, also noticing sales increases. The move couldn't have come at a better time: the United States housing bubble was about to go bust, which hit Florida especially hard. Unlike most such promotions, the Subway franchises didn't see a decline in profit margins, nor did it sell each sub at a loss.
Meanwhile, Subway executives at the company's headquarters in Milford, Connecticut were getting tired of the company's longtime ads featuring Jared Fogle, and wanted something to compete with the various dollar menus at McDonald's, Burger King, Wendy's, and Taco Bell. Although several stores were skeptical of offering $5 footlongs, stores in Chicago and Washington, D.C. followed in the Miami stores' footsteps and saw instant sales increases. Some stores in blue-collar neighborhoods (notably East Cleveland, Ohio locations) were seen offering steeper discounts at the height of the promotion, such as 5 dollar footlong combos (Sub plus chips/cookie and a drink).
Although Subway didn't require its franchises to implement $5 footlongs, it rolled out the promotion nationally on a limited time basis in March 2008. Sales shot up immediately for the company. To go with the promotion would be the "$5 footlong song" which was deliberately designed to be campy and has in itself spawned a life on its own, including singing contests and as an internet meme.
There were nine $5 footlongs available on a regular basis in North America, and a tenth one as a monthly promotion in the United States. Of the nine regular footlongs, four are exclusive to some Canadian restaurants: As of September 2014, "Dropped" subs are now $5.25 in USA, however some locations may still have a $5 footlong for the month (or $6 for a higher-cost sandwich). Alaska and Hawaii charge more for these value subs.
|Black Forest Ham||BLT||Cold Cut Combo||Meatball Marinara||Pizza Sub||Spicy Italian||Egg and Cheese||Egg Salad||Falafel||Veggie Delite|
|United Kingdom ||Yes||No||No||No||No||Yes||No||No||No||Yes|
|United States ||$6 in October||Dropped (though still orderable in some locations)||Dropped||October||Dropped||Dropped||Dropped||No||Some locations||Yes|
Following the initial $5 footlong promotion's discontinuation in May 2008, Subway created a permanent menu with five footlong subs available at $5 every day. The company also experimented with $5 meals, which include a six-inch sub with a drink and a side. The program remains franchise-optional. In 2009 alone, the various $5 footlong promotions spawned $3.5 billion in sales for Subway.
Throughout every February since 2008, plus the month of September in 2013, Subway sells all 21 regular footlongs for $5 each. Subs in the Premium and Supreme categories cost more. In September 2014, most subs were raised to $5.25 or $5.95 and only two regular $5 footlongs remain. By Christmas, all the subs now cost $5.50, though those at $5.95 fell down to $5.50 as well.
Subway launched the $5 footlong promotion in the province of Ontario on January 11, 2010. It featured the same value submarine sandwiches found on the value menu in the United States, although Canada also made them available as $5 salads. By April 20, 2010, the promotion was extended to Quebec and called "12 pouces, 5$" (12 inches, 5 dollars) in French. The deal was made available throughout Canada on December 30, 2011. Outside of Québec, the promotion ceased by Q4 2012 and now charged at least $5.25 per footlong sub, despite a massive $5 footlong campaign in the previous fiscal quarter. By the end of the year, salads in those regions also faced a price hike, leaving only the egg and cheese footlong at a $5 price point.
For most of Q3 2013, Ontario stores selling $5.25 footlongs now charged $5.50 for them. Québec, however, continues the $5 footlong promotion to this day. The $5 price point returned on September 16, 2013 throughout Canada. It coincides with the United States' "SUBtember" promotion and the launch of a new falafel sub in some Canadian markets. It continued throughout October 2013, after which these footlongs faced price increases: $5.50 at the time for most subs, and $5.95 in September 2014. In all cases, prices are set by franchisees and thus may vary per location.
The UK now has their own value menu range where a 6 inch sub (from a limited menu) and a drink costs £3 called a "Subway Lunch" (just under $5, inc taxes) or a footlong as a lunch (again, from a limited menu) will also cost just £5.
In Australian stores a similar campaign runs for its cheapest subs at $7 instead of $5. This is the same pricing as in New Zealand stores.
Although the Subway Franchisee Advertising Fund and Trust still employs Jared Fogle in its ads, both Fogle's health-conscious ads and any "$5 footlong" ads are run concurrently as separate ads.
In March 2013, Subway started to do a 6-inch select, of which they had a 6-inch sub for $3. The deal ended in May, and had been replaced with the $4 Lunch deal, which was then replaced with a Simple $6 menu of 8 subs with chips and a small drink. In 2014, the 6-inch sub specials are going for $3.50, and late in 2014, $3.95.
Effect on the competition
Several competitors ended up following Subway's success with the $5 footlongs, including Pizza Hut, Arby's, and KFC, which have introduced similar round price points. Many consumer goods outside of the restaurant industry have also adopted round price points as well. Togo's Sandwiches also has a similar offering, where consumers can purchase a "$5 Daily Special Deal", consisting of that day's sandwich, a drink, and chips, with also the choice of purchasing the sandwich separately for $3.99.
While Subway has allowed the "$5 footlongs" to remain franchise-optional, Burger King took the opposite route, requiring all locations in 2009, both franchised and corporate-owned-and-operated, to sell the double cheeseburger for $1. The move led to over 80% of their franchisees suing the parent chain, claiming that they were losing money on the items selling for $1, and that Burger King couldn't dictate maximum prices. Although Burger King later won the lawsuit, it raised the price of its double cheeseburger to $1.19 in response to the lawsuit.
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