Subway Breakfast Experience Not Exactly a Wake-up Call

Chain Has Uphill Climb for Morning Daypart

Posted by Emily Bryson York on 11.10.09 @ 05:25 PM

CHICAGO (AdAge.com) -- Subway announced last Friday that it would expand its test of Seattle's Best Coffee to 9,000 of its locations in an effort to drive morning business -- but it is going to have its work cut out for it if anecdotal evidence is any indication.

It's not just that Dunkin' Donuts responded by announcing a 500-store test of a breakfast dollar menu in Chicago. Or that, as The Wall Street Journal reported last week, McDonald's will also offer a breakfast dollar menu come January.

Price isn't even the major hurdle. The biggest problem is getting people not to think only about $5 footlongs when they think of Subway. "To some extent to be successful, you have to be disrupt the consumer's behavior with a compelling reason to change it," said Darren Tristano or Technomic. "And price isn't an issue anymore because everything is cheap. It has to be about quality, freshness, or something different like oatmeal or an organic product."

Whether that can happen remains to be seen. But visits to Chicago-area restaurants show that can be difficult. Before you even consider Subway, think about Dunkin' Donuts, which has a hard enough time getting customers to shell out for something resembling a full breakfast. The place definitely thrives in the morning, selling coffee or a pumpkin latte to nearly every customer in the store. Of those spotted lining up for morning Joe, more than half of them paired it with a doughnut, munchkin or muffin. But only one in ten ordered any kind of breakfast sandwich.

Dunkin's morning dollar menu includes two small egg sandwiches, hashbrowns and a choice of several munchkins. The veggie egg-white flatbread, for $2.99, seemed to have been made to order. It was juicy and flavorful, with spicy cheese, crispy bread, and served as a healthy portion.

Five minutes later at Subway, which has yet to build awareness for its breakfast offerings, one customer ordered a veggie burger while an elderly woman, who appeared to be waiting for someone, looked out the window. Everyone else in the store was either working for Subway or Ad Age. The chain's breakfast offerings include egg-and-cheese, egg-and-ham, Western-omelet-with-ham, and egg-and-double bacon sandwiches on either a sub roll or flat bread.

Perhaps the most trying part of the experience is watching the "sandwich artist" pull a yellow, rubbery-looking disk from a warmer and fold it inside of a sub roll. We didn't expect farm-fresh eggs, but some things are better kept out of sight.

There's another odd moment when you're asked which toppings, many of which most consumers currently associate with their $5 footlongs. But it all ultimately winds up in a warm, 6- or 12-inch sandwich that's crunchy on the outside and gooey on the inside. But do the ends justify the means?

Mr. Tristano said it comes down to how far you can stretch your brand. "I can't think of too many submarine sandwich chains that have had success at breakfast," Mr. Tristano said. "Consumers don't seem to be gravitating to those locations, they're gravitating to the Dunkin's and Paneras in the bakery-café segment."

9 Comments

By tommyzman | Oak Ridge, NJ November 11, 2009 08:45:47 am:

I spent close to two decades in brand development and the term "Core Competency" was sure used a hell of a lot.

Hey Jared, knock off this foolish breakfast idea and make me one of them crappy, pre-sliced roast beefs, will ya?

Tommy Z . Publisher, PLanetZman
The Last Great Bastion for REAL Men
http://www.planetzman.com
http://www.twitter.com/planetzman

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By sheiglagh | Dallas, TX November 11, 2009 09:05:47 am:

cereal anyone?

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By Kevin | New York, NY November 11, 2009 09:12:37 am:

Look out - Al Ries is putting together another "anti-brand-extension" manifesto as we speak !!!

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By Steve | Calgary, AB November 11, 2009 09:40:29 am:

Yep, and Rodney33 is putting together his egg-white paper.

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By Rodney33 | FRISCO, TX November 11, 2009 09:50:25 am:

Challenges

Lack of overall awareness in the category.

Hyper competitive day part with eroding margins.

Lack of drive-thrus; Breakfast is dominated by drive thru traffic outside of urban centers like the Chicago Loop.

Opportunities
More locations than anyone, including McDonald's.

Fresh baked bread on-premise - no other player in the category has this.

Distinct position of being a healthier, lower calorie choice - easy to position against doughnuts and McGriddles.

If the day part minimally breaks even, it covers a portion of overhead which improves overall margin.

Existing advertising can be leveraged to promote the segment with the strategic intention of cross-selling morning customers with incentives to return for lunch.

Rodney Mason, CMO
www.moosylvania.com
www.twitter.com/rodmoose

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By thelostagency | Brisbane November 11, 2009 10:36:12 am:

In Australia initially Subway was using fresh egg but agree that the move to the yellow rubber patty just doesn't appeal for the price of their breakfast wraps. It does make it quicker and easier for staff but if i was thinking microwaved rubber i would consider McDonalds breakfast... and its cheaper...

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By alexplew | Grapevine, TX November 11, 2009 11:32:45 am:

Need drive-thru to capitalize on breakfast

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By tommyzman | Oak Ridge, NJ November 11, 2009 05:07:29 pm:

"Need drive-thru to capitalize on breakfast"

Agreed, but we sure as hell are on lazy-ass society.

Tommy Z . Publisher, PlanetZman
The Last Great Bastion for REAL Men
http://www.planetzman.com
http://www.twitter.com/planetzman

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By jls1 | Lawrence, KS November 12, 2009 12:33:07 pm:

Subway has an established brand already. I understand wanting to expand the brand but this is not the way to do it. The five dollar foot longs are a hit. If they added more sandwiches to the selection of the foot longs that may be something that more people would respond to. I have bought a five dollar foot long and it is just the foot long. If they included chips and a drink I think people would definitely respond. It is hard for the consumer who has such a fixed idea of a company to associate it with anything new especially if they are not going to use the freshest ingredients. With the slogan "Eat Fresh," I find it ironic that they do not us farm fresh eggs. Breakfast is a hard enough market for those already in it. Subway would be better off fine tuning something that already appeals to its customers.

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