Subway Deems Breakfast a Success

MILFORD, Conn. -- After serving breakfast for four months, Subway said the daypart has increased sales systemwide and exceeded expectations, leading the sandwich chain to expand its early-morning menu with limited-time offers and explore offering more coffee and espresso-based beverages, according to a report by Nation's Restaurant News.

Larry Varvella, Subway's research and development project leader, told the publication that the chain's foray into breakfast -- a daypart filled with such heavyweights as McDonald's and Dunkin' Donuts -- has been a success for the brand and its franchisees.

"We're very excited that our initial results show it is outperforming even our original expectations," Varvella said. "Those original expectations were based on our franchise owners breaking even at the least. Of course we fully realized that to be a major player [at breakfast], we needed a long-term commitment. We figured that would be a three to six month period. The last thing we wanted was for our owners not to be profitable."

The Milford, Conn.-based chain introduced its breakfast program April 5, in more than 25,000 Subway restaurants across North America. The menu features egg and cheese sandwiches served on whole-wheat English muffins, flatbreads or Subway's traditional 6-inch and footlong hoagie breads. Prices range between $1.75 and $2.25 for the English muffin melts; $2 to $3.50 for the 6-inch hoagies or flatbread sandwiches; and $4 to $6 for the footlong variety, the report stated.

More sandwiches are on the way, according to Varvella, although he would not disclose what was in test or when new items would debut. "We are definitely looking at introducing new items through limited-time offers," he said. "We fully believe that new products are one of the life-bloods of a restaurant chain. We want to keep [the program] new and exciting, and have a lot of items in the pipeline."

He also noted Subway is considering expanding its beverage line to include espresso-based and flavored coffee drinks. "Coffee has been a very strong part of our program," Varvella said. "We're looking at expanding with Seattle's Best above and beyond standard drip coffee."

While Varvella would not disclose sales for the breakfast program, he said several barometers have determined its success, including the acceptance by Subway franchisees.

"The franchisees are happy and the customers are buying the product," he said. "In the past, the menu mix was higher in non-breakfast items, but now we're seeing equal amounts [in sales] of about 50 percent breakfast and non-breakfast, which again, is ahead of projections."

The two best-selling breakfast items for Subway are the egg white western melt and the double bacon and cheese omelet. Latest promotions have highlighted the chain's steak, egg and cheese sandwiches, according to the Nation's Restaurant News report.