Q&A: Subway Chief Chats About Sales Surge

With Starbucks’ store closures gracing the cover of a local New York paper; the CEO of Subway Franchisee Advertising Fund Trust Jeff Moody had a different story to tell while sipping a coffee outside the beleaguered coffee chain. Thanks to Subway’s spot on health positioning and $5 subs, the world’s largest fast food chain is experiencing double-digit growth. Moody, who has held the post for a year, has successfully helmed the chain’s advertising arm while burger sales have gone flat and pizza sales are cold. In an extensive in-person Q&A with Brandweek News Editor Kenneth Hein, Moody proclaimed his loyalty to Jared Fogle, his gut feeling that breakfast at Subway will go national and his disdain for the TV Upfronts. Here is what he said:

Brandweek: What’s your marketing strategy these days?
Jeff Moody: We have three strategic platforms. The first two revolve around health. We have our “What you’re really getting” ads which positions our food against burger guys and other options. The ad “Receipt” was really well received. The guy in the ad didn’t have his receipt from his lunch so he just photocopied his butt after eating [an unhealthy meal elsewhere]. The second part is Jared. The big news is this is the 10th anniversary of Jared losing the weight. Losing weight is hard and keeping it off can be even more difficult so we’re doing a program called “Tour de Pants” which kicked off in Times Square right after the Super Bowl. The pants he used to wear that he’s used as a prop will be retired this year and put in a museum for advertising icons. We did some advertising. We called it “Jared’s Peeps.” It was Jared with all of the famous people he has appeared with over the years and put it into a montage scene where they congratulated him on his 10 years. Then there’s value. Value is a huge factor for people in today’s economy. We’re in a category that has experienced explosive growth for years and has basically flattened out so it’s a share battle. We addressed it with the $5 foot-long subs. We kicked it off in March with eight of subs for $5 and some stores have elected to keep them all at $5. That has done exceptionally well for us.

BW: One criticism I’ve heard is that you rely too much on Jared and need to get rid of him.
JM: There is no reason to move away from Jared. Now you need to broaden it so he doesn’t become the only thing we stand for, but it makes no sense [to move away from him]. Every time we do advertising with Jared we get instant recognition. People relate to him. He is such a clear communicator of weight loss. He is as popular as ever. It’s kind of funny you go out with him to these events and he’s like a rock star. The public loves him. He’s approachable. He’s like an everyman who has made good. They all feel like they know him. You go down the street and the cops say, ‘Hey Jared, let’s get a picture taken.’

BW: Will the $5 sub stick around?
JM: There is a ton of cost pressure on this business from the supply side, fuel markups, labor costs are going up, and utilities are going up. Despite that we’re going to try and keep the price point where it is. But, we have good economics and good franchisees. And it turns out there is a lot of price elasticity. The traffic response has been remarkable. That price point is magic. Everyone in the world is copying it now. Not just the sandwich guys but also the burger guys. They are all trying their version of the $5 [item] because it is such a good price point. In this economy you have to have value. Fast casual chains are well positioned when people have money, but now people don’t want to spend $8 for lunch, they want to spend $5. We’re well positioned.