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Subway Sets Record Pace for Expansion in China as Market Rebounds

Subway, the global sandwich chain, has launched an unprecedented expansion campaign in China, set to make the country one of its fastest-growing markets. Following a significant shift in management and strategy last year, Subway now aims to open hundreds of new stores annually, marking an ambitious turnaround for the brand. This year alone, Subway China expects to add at least 200 new stores, and over the next two decades, it has committed to reaching a total of 4,000 locations across the country.

The chain’s growth rate in China has dramatically accelerated following the acquisition of the brand’s mainland franchise rights by Shanghai-based Focus Brands (富瑞食企业发展有限公司) in mid-2023. Under this new management, Subway has shifted from a franchise-heavy model to one prioritizing company-owned stores, a strategic pivot designed to enhance quality control and customer experience by enabling quicker implementation of new ideas. According to Zhu Fuqiang, Subway China’s CEO, this shift has been essential in ensuring that each location can provide a better, more consistent customer experience.

One key location illustrating this new approach is the recently opened sports-themed Subway store on Sichuan North Road in Shanghai, which also holds the distinction of being Subway’s 4,000th outlet in the Asia-Pacific region. This flagship store received considerable attention, with Subway’s global CEO, John Chidsey, visiting for its grand opening. Chidsey emphasized Subway’s commitment to adapting to Chinese consumer preferences, noting that the country’s growing emphasis on fitness and wellness has influenced the design and menu offerings at the new store. The interior, featuring elements like yoga balls, skateboards, and bicycles, reflects China’s wellness trend and Subway’s attempt to blend into it.

Subway’s China team has been innovating its menu to appeal to local tastes, introducing options like Teriyaki Beef and Sichuan-style spicy sandwiches. This approach is supported by an in-house test kitchen that frequently experiments with new products and invites customer feedback through taste tests. Zhu Fuqiang shared that since July 2023, Subway China has introduced numerous new items to the menu, with more localized options planned, especially during peak seasons like the Lunar New Year.

To appeal to budget-conscious Chinese consumers, Subway has also introduced value-oriented offerings, such as a 9.9 RMB breakfast combo featuring coffee and a small sandwich, in an effort to attract a broader customer base. The move is part of a larger strategy to position Subway as an affordable yet quality-focused option within China’s highly competitive fast-food market. Subway has also highlighted its practice of baking fresh bread multiple times per day at all locations, underscoring a freshness claim that Zhu Fuqiang argues distinguishes Subway from other fast-food chains reliant on frozen ingredients.

As Subway continues to expand in China, its focus will initially be on major metropolitan areas, with plans to gradually move into smaller cities as the brand gains stability and recognition. The goal, as Zhu Fuqiang described it, is not just rapid growth but to create a sustainable market presence through quality and consistent brand messaging.

Aris

Airs in Shanghai, focus on Chinese food, lifestyle and business.

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Aris

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