Where Togo’s Went Right (And Subway Went Wrong)

October 13, 2021

Rise of Togo’s, Decline of Subway: What We’re Doing That They’re Neglecting

Ask Americans what comes to mind when they hear, “sandwich restaurant,” and most of them will probably reply, “Subway,” as in the worldwide chain that pretty much invented the quick-service-restaurant category in 1965. The original franchisors were certainly responsible for starting the “how to make and eat subs” momentum that spread the long-bun sandwich beyond the Northeastern U.S. and throughout the country, not to mention the larger world.

Nonetheless, Subway isn’t the dominant force it once was. Since 2013, its share of the Top 500 sandwich market has declined from 41 to 28 percent, and its serious competitors now number 52. That’s not simply due to the COVID-19-related business shutdowns of 2020, either: Subway’s sales slump started in 2013, and thousands of its restaurants had already closed by 2015. Nor is Subway holding its ground as well in tough times as many other sub providers have been: while the restaurant business as a whole saw an 8–9 percent decline in sales in 2020, and the sandwich category around 13 percent decline, Subway’s sales have dropped almost 33 percent (from $12.8 billion to $8.3 billion) since its downward slide began.

On the West Coast in particular, San-Jose-based Togo’s Eateries, having been “True to the Sandwich” for half a century since 1971, is rising toward market dominance as Subway’s share continues to shrink. Our sales have been climbing 18 percent or more per month in 2021, and we ended 2020 with nearly 200 units open or under development.

New Normal, New Customer Needs

While the economic downturn and need for health-friendly service that began in early 2020 weren’t among the factors responsible for Subway’s initial decline, the chain’s slow response to the “new normal” did little to improve its sales or brand image. The skyrocketing demand for quick-pickup options and low-contact service, plus the crash of the event-catering business, were major factors in separating restaurants that keep up with market needs from those that don’t. Before and during the crises of 2020, here’s what Togo’s has done that Subway hasn’t.

We’ve designed our phone app to make remote ordering and account monitoring as easy as can be.

Once customers download the Togo’s app from the Apple or Google store, they can quickly place orders, redeem Rewards points and review their transaction histories from their smartphones.

We’ve introduced kiosk ordering systems that are easy and even fun to use.

None of the complicated, error-prone technical hoops that too many ordering systems make customers jump through until it’s easier to just wait in an old-style line. Even customized orders are super-simple with our kiosks.

We’ve revamped and sped up our sandwich-making system.

This allows us to provide customer service even more effectively. In addition, low counters with see-through partitions offer a front-row view of the sandwich-making show.

We’ve fully integrated the use of third-party delivery.

Delivery providers are now integrated into our systems to ensure that our customers get their Togo’s sandwiches more conveniently than ever.

Many of these changes began in 2019 with our “3.0” remodel program, which was already geared to keeping up with changing times. The 3.0 program also revamped the in-store experience with better lighting and a white-blue-and-orange interior color scheme, plus bringing in new state-of-the-art ovens that make hot sandwiches come out tastier and “meltier” than ever.

All told, Togo’s has made it a priority on every level to introduce better operations, maximize customer service and continue providing convenient, delicious meals—in all circumstances—to our legions of raving-fan customers. While too many “big name” brands take customer loyalty for granted and ignore the need to adapt and listen, we continue to focus on serving up the best possible experience to every customer. And we have no intention of letting our rapid growth spoil that mission. We continue to seek out dedicated franchisees who stay “True to the Sandwich” and true to our core values!

About Togo’s Eateries, LLC

Togo’s Sandwiches was founded in 1971 in San Jose, California, by a young college student intent on making sandwiches the way he liked them—big, fresh and meaty. Our products still use the highest-quality ingredients, from fresh artisan breads to hand-sliced premium meats and fresh hand-mashed avocados. Togo’s has nearly 200 Western U.S. locations and room for many more. To learn more about opening your own Togo’s and what we are doing to position our brand for the next 50 years, contact Obed Hernandez at 615-605-0703 or [email protected].