Subway Set to Overtake McD's in Store Count

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Subway Set to Overtake McD's in Store Count

CHICAGO -- Subway will overtake McDonald's and become the world's largest fast-food chain in terms of locations within the next few months, according to an Advertising Age report.

With 31,771 locations as of press time and expecting to pass 31,800 this week, Subway is racing toward McDonald's 32,158 total restaurants. In overall sales, however, the Golden Arches are still far ahead. The average U.S. McDonald's had about $2.3 million in sales last year; the average Subway made about $445,000, according to Technomic.

Subway Development Director Don Fertman said this milestone reflects not only the importance of convenience, but of fresh alternatives and custom-made food.

"Our customer wants quality products, not pure convenience, and [our customer also wants] customization -- more or less vegetables on the sandwich, cucumbers or no peppers -- [a sandwich] made exactly the way [he or she] wants it," Fertman said. "And there aren't a lot of folks that do that on fresh-baked bread."

McDonald's slowed its expansion efforts in most countries during recent years to focus instead on existing-store profitability. Spokeswoman Lisa McComb said simply: "Our focus continues to be on our customers around the world."

Meanwhile at Subway, unit growth has been a key component of its mantra since the early 1980s. Fertman recalled starting at Subway in 1981 when there were 166 locations. He was charged with preparations for the 200th location, which was expected in a few years. But at his first meeting with co-founder Fred DeLuca and the initial international development team, DeLuca proclaimed that Subway would have 5,000 locations by 1994.

"We thought he was nuts," Fertman said. But soon, everything from store banners to corporate letterhead proclaimed the 5,000 store goal. Subway actually had 10,000 locations by 1994, according to the Advertising Age report.

At this point, Fertman said, Subway doesn't need to add locations to build awareness and strengthen its brand, and it's unlikely to use the milestone in any formal marketing efforts. It's not going to make consumers want to buy a sandwich, he said, but it will help the company build its franchise system even further. And it's big deal at corporate headquarters, where there's free ice cream for the entire staff every time Subway opens 100 locations. "I like the raspberry sorbet," Fertman said.

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