#160 The Subway System in Austria
After a golden age of expansion in the 1980s, 1990s, and early 2000s, the last decade hasn’t exactly been the best for sandwich chain Subway. A few years ago, Subway had approximately 42,000 restaurants in 111 countries globally, and proudly proclaimed itself the world’s largest fast food chain. In recent years, Subway experienced challenges in many countries and shrunk both in numbers of restaurants and countries. In the United States, the company suffered from serious fallout over its spokesperson Jared Fogle’s conviction as a sex offender, its sales declined, and it had to shut down hundreds of stores year after year. In 2018, the number of store closures even exceeded 1,000. In overseas markets, the picture was a bit more mixed. Subway downsized and withdrew from some, but expanded in other markets. While only a drop in the global bucket for Subway, Germany, for instance, proved to be more favorable territory. Between 2015 and 2019, Subway expanded from 610 to more than 700 stores, and sales increased by about 10 percent to just under EUR 300 million. And what about Subway in neighboring Austria? With less than ten restaurants hardly a major market, Subway seems to be trying hard to be of even less significance. In a market where rival McDonald charges a total of 5 percent in combined franchise and marketing fees, Subway takes more than double from its franchisees – a whopping 12.5 percent. Plus, Subway does not guarantee territorial exclusivity, which sometimes puts franchisees into tough competition with each other – franchisees lose while Subway wins. When one of its Austrian franchisees left Subway in 2019 because of these unfavorable conditions and started an independent sandwich shop, Subway tried to shut its former franchisee’s new operation down via the courts. The action immediately drew the attention of the media, and Subways image – which wasn’t favorable to begin with – suffered even more. At the time of this article, the outcome of the lawsuit was still uncertain, but in Germany, a court had already ruled against Subway in a similar case, and similar outcome was to be expected in Austria.
April 2, 2020 @ 5:24 am
For many years, Subway has been criticized by its franchisees, not only for its outrageously high fees, but also for the accusations of excessively concentrating franchises outrageously close to each other. Massive numbers of lawsuits were filed, because of this, and Subway’s reputation is rumored to have been severely affected.
Then comes the lawsuit alleging that the “foot long” sandwich is not really a full 12 inches (as highlighted by a young Subway customer from Australia). The company was accused of quickly settling (in 2015), to simply make the lawsuit go away, but the agreement was tossed out in 2017 by the 7th US circuit court of appeals, which called the settlement “worthless, and stated, “A class action that seeks only worthless benefits for the class and yields only fees for class counsel is no better than a racket and should be dismissed out of hand,” Circuit Judge Diane Sykes wrote for a three-judge panel. “That’s an apt description of this case.”
More bruises (and ongoing battles) for the chain. “Do you want your (less than foot long) bread toasted? Or should we simply continue to ‘grill’ the customers and franchisees?”
April 28, 2020 @ 9:16 pm
Are questionable contract terms the right way to gain the trust of customers and franchise partners?
Once you study the contract details of Subway franchisees, you get the impression that some details in the contract are different from others and also questionable. Aa few examples: As stated above, Subway takes more than double from its franchisees than Mc Donald´s for instance which is 12,5 percent.
Also, there is no territorial protection for franchise partners. This means that whoever opens up a Subway restaurant cannot be sure that Subway doesn´t open up a second branch just around the corner. This would be a major disadvantage for the franchisee, not for Subway as it doesn´t really make a difference if sales are divided into two branches.
It seems that the main method to make franchisees stay is to drag them to court and threaten them with unaffordable fines.
Franchisees are also not allowed, according to the contract, to open up a food business that could be a competitor for Subway even after termination of the contract. Their method of pushing this through? Court.
Franchisees complain that Subway doesn´t care about its locations and that they don´t receive support from the parent company. Their accusation: Subway just cares about the commission.
Seems like the relationship between Subway and their franchisees is broken and maybe this is something that Subway should work on in first place in order to gain back customers trust.
April 29, 2020 @ 7:03 am
Dear Gerhard,
thanks for the very interesting article about subway and its franchise system.
Generally, I’m not so surprised about their non-success in Austria.
The Austrian market isn’t well known for the success of international fast food chains. TGI Friday? Had a restaurant in Vienna but closed it after a few years. KFC? A handful restaurants, but a non-factor in Austria. Dunkin’ Donuts? Less than half a year ago, the next DD store in Vienna is facing insolvency. With the exception of Mc Donalds (and with deductions Burger King) Austria is looking like a pretty difficult new market for expanding fast food chains.
In my mind, there are different reasons for this. We do have a tradition an mentality for Guest houses (not to be compared with pure restaurants) and fine bakeries. As well as the typical Austrian likes to stay for an hour at his favorite coffee shop a read his daily newspaper. A not just to grab a coffee-to-go and a bagel.
Austria is Austria. Always a bit different then its big neighbor, always very special.
June 21, 2020 @ 7:30 pm
In my opinion, there was not really a need for another fast food chain in Austria. A further aspect is that the product sandwich is bought among the Austrian population also gladly in supermarkets, which are at each corner and with which one feels safe on the quality of the ingredients. Due to the fact that Austria is one of the countries with a higher level of uncertainty avoidance, it is not surprising that local restaurants or fast food chains which have been around for a long time are preferred. To me it feels as if it is not necessary for an Austrian to have a sandwich in a restaurant that does not offer alternative meals, especially in more rural areas where many people like to have a “Jause” at home. So, I think that the franchise model was not the only problem for Subway in Austria.
June 29, 2020 @ 6:39 pm
In my opinion, it is not surprising that Subway does not work so well in Austria. Austrians are emphasis on regionality, which Subway does not want to support. But not only that, fast food chains are not the most popular restaurants in Austria. Besides MC Donald’s, hardly anyone has a chance to survive. KFC and other well-known fast food chains are not so popular in Austria. If Subway would adapt its products to the Austrian market and, for example, buy the ingredients for the sandwiches from Austria and communicate this, so they most likely would have a different status in Austria.
June 29, 2020 @ 6:40 pm
It doesn’t surprise me, that Subway and its franchise system has a bad reputation. In my hometown (which is in Austria), we also have a shop, which is unfortunately directly next to McDonald’s. The McDonald’s store is always very crowded, and many people line up at the checkout to get one of the highly coveted burgers. In contrast, you hardly ever see one single customer at the Subway store. However, if you visit Subway in another country, for example in the UK, you will not believe that it’s the same retail chain. Here, one always meets a lot of people, comparatively as many as in a typical McDonald’s store in Austria.
Anyway, it seems that McDonald’s is the only international fast-food chain, that has succeeded in Austria. Also, other global players like KFC or Pizza Hut entered the Austrian market and had little success. For instance, Pizza Hut had five stores in Vienna and had planned to open 50 stores throughout Austria. Due to the lack of success, they have already left the market 10 years ago.
June 29, 2020 @ 10:13 pm
I think this is a good example of a company that has rested on its past success and realized too late what a threat the competition poses. In addition, they combined this market blindness with greed, which was particularly noticeable among franchisees.
Although the concept could certainly have been successful in Austria, the way it was implemented was simply inadequate. Above all, the unthought-out communication, which is more expensive for the franchisees than the competition, shows the lack of understanding of regional peculiarities and trends.
In comparison, McDonalds supports its franchisees, knowing how much the success of the entire company depends on the individual branches.
In my opinion, a different management with more vision could have made the company very successful in Austria.
June 30, 2020 @ 10:57 am
Dear Gerhard,
Thanks for reminding me of Subway. Immediately come a lot of emotions to my mind. I like it a lot actually, the sandwiches taste great, no doubt. There are different flavors. Different bread, filling, topping and sauces. It is special that you can build your own every time, although I would have liked the option to just get a pre configured one. It is a hassle sometimes to choose the same ingredients every time over and over.
And, they only sell sandwiches, there are no sides. You get a drink and a cookie but that’s it. It is too much / too big to eat it on the go. Perhaps in big cities it is more acceptable. And a sandwich to little to eat it in store. There are no fries.
Also you always think, you could have eaten two of them. And the prize is not cheap either. At McDonalds you can get more bang for the buck. A footlong costs 7 Euros.
And the stores are always shabby in my eyes. That’s also a problem.
All in all, nice food. But the circumstances make it unenjoyable.
BR Max
July 2, 2020 @ 8:34 am
I think there are a few reasons why Subway struggles in Austria. It seems like Subway took what worked in the USA and just expected it to work when they copy and past it in a different country, without making many changes. I personally think that the stores usually look a little outdated and don’t look very inviting , compared to a McCafé for example.
During my time in the USA I did enjoy Subway a lot and we usually used the drive through , which isn’t available in Austria (I think the modern drive through system works very well for Subway). Additionally it never looks good for a company that seems to only care about the money and not about their franchisees that do all the work! The media today, with its „canceled culture“ is something that companies, like Subway, should be very aware and afraid of when starting lawsuits against people just trying to make a living.
November 10, 2020 @ 4:38 am
Subway found a way to become successful, not just in the United States, but globally. However, with Jared Fogle’s conviction, Subway lost its good reputation. When a company loses its reputation, it usually negatively affects the company. While Subway has been able to stay successful in Germany, they probably thought that they could be just as successful in Austria. However, this has not happened. While both McDonalds and Subway are fast food chains, they serve different types of food. Austrians may have a different taste in foods. Subway has yet to find a way to adapt to the Austrian culture. In addition, I believe that by trying to shut down a former franchisees’ independent sandwich shop gives Subway a bad reputation as well. Subway does not have exclusive rights to making sandwiches, therefore, others have the ability to open their own shop. Especially because Germany went against Subway in a similar case, Subway should know that they do not have much ground to win the case in Austria. Subway should find a way to remove themselves from Austria and put their efforts into becoming successful in another country.
January 12, 2021 @ 3:54 pm
It is very interesting to read about Subways way into the Austrian market. I work very close to the Subway location which was the one to be sued in May 2020. Even though it might not be the very best spot for selling sandwiches, if Subway had a good reputation in Vienna people would go the extra mile to get themselves a sandwich for lunch. According to the news, the franchisee, Mr Kozak, unsuccessfully tried to reach out to the Austrian country manager of Subway after he had to declare insolvency. There was no way to find a solution with Subway and help Mr Kozak in his situation. Now, after breaking up with Subway, Mr Kozak opened a new sandwich store on his own and got sued by Subway for breaching competition clause. Local news were stating that Subways went even to threaten other franchisees with legal actions if they were to do the same as Mr Kozak. Also, Subway made sure that the sandwiches of Mr Kozak are not delivered by Mjam.at, the biggest food delivery service in Austria – because of exclusionary clauses. For sure the sandwich business is very competitive and hard. However, 12.5 % franchise fee and 4.5 % marketing fee is a lot to carry if the brand is not worth it. Subway seems to have several problems to enter the market in Austria. The brand is not linked with the image of high quality, delicious sandwiches. Instead the logo looks for me old fashioned and shabby. All in all, Subways actions are not helping its brand and it looks like they are trying to grasp any straw to avoid extinction.
I read in the news that another Viennese Subwas franchisee (Kaiserstraße, 7. District) decided to quit the contract with Subway and now works as a franchisee for the new business of Mr Kozak (https://www.derstandard.at/story/2000117667634/wiener-gastronom-bringt-netz-des-us-fastfoodriesen-subway-zum-broeckeln). I hope they can make a better business case out of it. Still, the competition stays strong. I heard that the Californian burger chain In-n-Out Burger will come to Vienna soon. We will see how they manage the market entry.
January 13, 2021 @ 12:10 am
In N Out in Vienna? That would be revolutionary (and very well worth the visit….)!
January 16, 2021 @ 4:34 pm
In my opinion, Subway causes its difficulties on the one hand with its product range and on the other hand due to its contracts with Franchisees. First of all, although the sandwiches are advertised as healthy but they are in no way healthy at all. A study by the University of California confirms this. Subway also does not reveal the calories of its products. In terms of Austria, I would argue that the typical Austrian wants a warm sandwich with a really crispy bun and not the soft stuff from the land of junk food, the USA.
The second problem is clearly the hard contracts with over 600 pages to the disadvantage of the franchisees. Legal disputes, according to the contract, have to go through arbitration in New York. Such one-sided contracts are dangerous and unacceptable! Subway earns its money not with the sale of food but with the sale of Frenchise stores. Therefore, it doesn’t matter how many stores close. The only relevant thing is how many new stores open. In many countries, it is now no longer possible to obtain a loan from a bank to open a Subway store.
February 5, 2021 @ 8:28 pm
From my experience the German food market cannot be compared to the Austrian. While the German consumer is highly price-sensitive and not that much concerned about quality, the Austrians are much more quality-sensible and also willing to pay for better quality. In addition, recent studies show that for 32% of Austrian consumers, the origin of food plays a decisive role in their purchasing decision. Since Subway is clearly not associated with regional ingredients, this is definitely a disadvantage.
From a systematic international market entry approach three steps are questionable. Firstly, the product readiness is hardly existing. Because, in Austria a sandwich is perceived more as a snack and not as a full meal. Secondly, sandwiches can be purchased nearly everywhere in Austria, in supermarket as well as gas stations. In absence of a clear unique selling proposition Austrians have simply no reason to visit a Subway store. This fact should have been taken into account when selecting the target market. And finally, entering the market with such high franchise fees, combined with high overhead costs based on Austrian food law leave the franchisee little chance of making profits. Therefore, the market entry mode was doomed to failure from the outset.
July 10, 2021 @ 12:33 pm
Subway has found a way to become globally successful, but they haven’t compared the differences between the German and Austrian Food market. German consumers are price-sensitive, while Austrian consumers are looking more for quality and are also willing to pay more for better quality. As already known, McDonald’s and Subway are fast food chains, but they serve different types of food. There is also the possibility that Austrians have a different taste in foods. A well-known fact is, that Subway is clearly not associated with regional ingredients, this is definitely a disadvantage. McDonald’s is offering meat from Austria and fries from Austria. Another important aspect is, that in Austria a sandwich is seen more like a snack and not as a full meal and sandwiches can be purchased almost everywhere, so Austrians have no real reason to visit Subway. With the final point, the high franchise fees for the market entrance, It was clear in advance that the market launch was doomed to fail.
July 11, 2021 @ 9:34 pm
It does not really come as a surprise that Subway’s reputation is constantly decreasing, especially in Austria. Low-quality ingredients and a mercenary behaviour do not go well with Austria’s love for individualism and flat hierarchies. It is a typical Austrian trait to cheer on the underdog which in Subway’s case here is its former franchisee and chef of Wichers, Philipp Kozak. Breaking the chains of a global fast-food chain to create a similar, but more thoughtful and regional concept? A classic Austrian fairy tale. The fast-food giant’s reaction of suing its new competition does not necessarily shed a good light on it. Further, the increasing number of “scandals” (such as Subway’s bread rather being cake than bread due to its high amount of sugar) does not quite align with the Austrian’s love for indulgence. Scandals belong to politics, not the cuisine.
December 4, 2021 @ 8:10 am
In my opinion, there are a lot of reasons to result in the failure of Subway, no innovation and management systems. First, Subway did not have new products. Like McDonald, it has new products and different promotions every season to attract customers. However, Subway did not change their products for a long time. In the national markets, McDonald will have a little change to cater to local customers’ taste. However, Subway sells the same products in the whole world’s markets. In addition, the management strategies are not performance. Subway takes more than double from combined franchise and marketing fees than McDonald. The new franchisees could choose McDonald instead of Subway. Moreover, Subway does not guarantee territorial exclusivity, which sometimes puts franchisees into tough competition with each other. This make franchisees could not keep their income and customers. It will result in that Subway lose their franchisees. When one of its Austrian franchisees left Subway in 2019 because of these unfavorable conditions and started an independent sandwich shop. Subway did not find its mistakes and discuss with the former franchisees. It tried to shut its former franchisee’s new operation down via the courts. The action makes the contradiction become terrible. It could make the franchisees not leave Subway, but it also makes Subway lose reputation. The potential franchisees could choose other brands to open their new stores.
February 2, 2022 @ 9:02 pm
This example of Subway is definitely proof of companies that do well in other countries and then assume that same success in other countries as well. I had a very similar experience with Subway during my time in Italy. In the small area of Florence there were 2 McDonalds and surprisingly a Subway, but the subway rarely ever had customers in it. Even as an American who missed home somedays, Subway would not be my first choice of homesick curing food. The reputation hit that they got from former spokesperson Jared’s conviction really took a toll on them as a company, especially in the United States. I grew up with distinct memories of commercials with Jared in them as the guy who lost an insane amount of weight eating at Subway. And to be honest, I think those same commercials made my parents feel more comfortable with getting “fast food” since it was marketed as healthier than other options. Now a days, event he Subway in Thousand Oaks sits pretty empty a majority of the time. It is very interesting why they limited their franchisees in Austria, when they already had a poor reputation. It felt as though they needed a rebranding, and not just int heir marketing, but also with how they plan to treat their employees and support the communities they are in.
February 19, 2022 @ 5:58 pm
I honestly think that Subway is only successful because it is almost everywhere in the world. Now it might not work in Austria or parts of Germany, but I feel as though I have seen them in every corner of the world. You can find them at airports, cities, and even in small rural towns. However, I rarely visit them and when I do I can’t say I see many people coming in to buy a sandwich. Especially in the U.S., their brand image has been tarnished. I think everyone remembers when they were sued for saying “eat fresh” even though none of their menus was fresh. Recently there was a study that came out saying their tuna did not contain any actual tuna DNA. It appears as though Subway cant go for longer than two years without having their brand be tarnished even more. This being said I have been to a Subway in Amsterdam and even Paris so it’s possible that in some countries their brand is not looked at the same. Needless to say they wouldn’t have to do much to avoid continuing on this path.
March 13, 2022 @ 6:18 pm
For me personally, it was not that surprising that Subway was struggling in the Austrian market. But what surprised me a lot more was the successful development in the neighboring country Germany, because both countries have some similarities when it comes to food. They both put emphasis on meat and vegetables for their meals.
In order to improve in the Austrian market, Subway would have been well advised to intensify its business development efforts in advance before entering the market. For instance, by regularly conducting potential target market analyses of various regions with a focus on promising locations in highly frequented, easily accessible and exciting environments. That also comprises competitors analyses regarding franchise pricing strategies. Selecting an optimal location for a Subway restaurant should be done in close cooperation together with the prospective franchisee following an in-depth analysis taking into consideration experiences and wishes of the prospective customers in the catchment area. Research brought to my attention that Subway reacted in Austria 2018/2019 with a new logo, modern color scheme and technical elements such as digital menu boards, tables with USB ports and WLAN to become more attractive again.
March 20, 2022 @ 2:39 pm
Great post, thanks. I remember the golden age of the company’s expansion really well, because I first got to know Subway in 1996 during my semester abroad in San Francisco. At the time, I was excited, especially since you could choose your own fresh ingredients for your sandwich. This new and individual concept was an alternative to McDonalds for me. I was not surprised to see a Subway restaurant in Vienna a few years later. From my point of view, Subway’s unsuccessful business performance was due to several factors. There was a lack of profound market analysis and an understanding of how to adapt to the culture and regional characteristics of the country. In comparison, McDonalds has various specific promotions and works with regional suppliers. I am not astonished that the concept has taken off in the German market. Austria has a very good cuisine, there is a very high quality standard, and it takes longer to get used to something new. In general, I think that the price-performance ratio does not fit, and no attempt has been made to make a change. The franchisees are charged far too high fees, unlike the competition, and the lack of territorial protection lets the company slip into a competitive trap.
From my point of view, it could have been quite successful in Austria – with a different management that has more foresight and systematic know-how!
March 26, 2022 @ 12:50 pm
It’s interesting to see that Subway seems to thrive in Germany but not in Austria, while both countries might seem comparable from a demographic’s perspective. The franchise fee is outrageous and explains why there aren’t that many stores in Austria. I also remember in Graz a Subway store which opened, closed shortly after that again because of sluggish sales. The territorial protection is most likely another reason, why there aren’t that many potential franchisees lining up to become a subway vendor. Part of the subway contract is also a competition clause, which prohibits Subway partners from competing with the U.S. chain after the contract ends. In my opinion one of the problems is that Subway doesn’t treat its franchisees as partners and instead tries to squeeze as much money out of them as possible. Along with revolting franchisees, I think the other challenge for Subway is its strong competition from Burger King and McDonalds in a saturated market. And on top of that, I don’t know any people in Austria who are craving Subway for their delicious food, so I think the brand and the food chain itself have lost their appeal.
April 2, 2022 @ 1:14 pm
Thank you for the interesting article about Subway. Personally, I was always wondering whey they are not able to get into the market as successful as we have experienced it from other countries?
I guess Austria is a hard market for Fast Food anyway, same as Italy or Swiss. The three countries mentioned have different expectations in nutrition which cannot be satisfied by the successful big ones (Mc Donald’s, Burger Kind, KFC, …). Nutrition is for the generation I belong and for the people living in the countries I have mentioned not a task to fill up ourselves with the required number of calories and micronutrients. We see this as a cultural matter and due to changing awareness of sustainability, environment, and working conditions of the staff we do not feel comfortable with all the influence and inventions from abroad. Could you imagine an Italian Mama is spending time for a Big Mac (instead of cooking Ragout for their loved ones) or a French business man inviting his associates to Burger King for lunch (instead into a lovely Bistro in Paris and enjoying real French Fries (twice fried) and a decent bottle of light Rose Wine)?
MC Donald’s did adopt to Austrian habits by serving high quality coffee and cake products using real dishes and cutlery. You won’t find this anywhere else at franchise fast food restaurants and they are the only one successful in Austria. Starbucks is selling coffee, but it is also not very successful in Austria based on known problems: it is not only the product, it (coffee and cake) is a portion of lifestyle.
Subway I always found interesting because there were all these fresh ingredients available, and they were able to process my special wishes. The rest of the fast food I must accept as it is produced (I tried to avoid using the work “cooked” because it is a systematic and very well-organized procedure to bring the different ingredients together without ever having an idea how cooking is working).
As we are in a business class, we should rather have a close look at numbers then on emotions as well. What I have learned it is difficult for Franchisee as Subway is claiming for a fortune of the revenue. Also, competition within the market of fast food is growing and hungry people can receive much higher quality food for same amount to be invested at Subways (or similar). Also, in the US Subway is facing decreasing numbers and the market in Europe does not shine brighter for them.
April 6, 2022 @ 8:37 pm
Hello,
it is interesting to read that Subway in America had such losses and had to scale down. I was not aware of this failure before. The comparison between Austria and Germany as a terrain for Subway is very interesting, because these countries are not so different in terms of culture and geography. In my opinion, Subway could also be successful in Austria if they aligned their franchise fees with competitors such as McDonalds and reduced the exorbitant fees or offered territorial exclusivity. Territorial exclusivity was also going to allow Subway to justify the high fees. The failure is partly due to a lack of market analysis to identify the culture and regional characteristics. Such a market analysis would have shown that Austrians place a lot of value on regionality. This is a factor that distinguishes Austria from Germany. McDonalds in Austria uses Austrian products, works with Austrian suppliers and advertises adapted promotions. If you compare the McDonalds in Austria and Germany, they partly offer the same basic product range, but the McDonalds also have different offers per country. In Graz, there is a Subway, which is right next to the McDonalds store. McDonalds always has masses of people, whereas Subway always looks very empty. Subway also has higher prices compared to McDonalds. Because of the above mentioned factors and other aspects, I don’t think the price-performance ratio of Subway is justified. I think Subway will only be successful in Austria if they lower the franchise fees and focus on regionality. This is the only way Subway can become competitive in Austria.
Despite everything, I have to say that a Subway sandwich is not bad sometimes. But overall I would prefer McDonalds.
April 26, 2022 @ 10:03 pm
When looking at the way Subway rolls in its Austrian endeavors there is not much to say other than – carelessly planned market entry.
As an MNC of this caliber Subway should be aware of the preferences of the market they are moving in. Austria is a country of “Semmerln und Kornspitz” – the most popular quick lunch is getting a sandwich at any grocery store around the corner. The “Semmerl-Kultur” is so deeply ingrained in the Austrian culture that is in any case a very tough ground for a Sandwich chain.
The only thing Subway had going for itself was the “USA-factor” as so many other companies have when they enter the Austrian market. I can name two failures like that on Mariahilferstraße alone – FiveGuys and Dunkin Donut. There were massive hypes about the restaurants being opened and people were standing in line to finally also get what they always saw in the movies just to be disappointed moments after. Dunkin Donut even closed its doors around a year after first opening. Why? Because just like with Subway the market analysis apparently went really wrong.
Tastes were not met
Hygiene standards were not met
Pricing was completely off
Common business standards were ignored
Etc.
Etc.
And therefore, trust in Subway was sooner lost than Dunkin Donut shut its doors.
July 5, 2022 @ 5:04 pm
To be honest I am not surprised about Subway not being successful in Austria. I am myself Austrian and always felt like Subway never really found its way in Austria. I remember Subway having a temporary hype around 2013 to 2014, soon after the company entered the Austrian market. I assume the initial success was due the concept of creating your own sandwich which was new to Austrians back then. Nevertheless, the hype seemed to be over really quick. I am convinced there is another reason behind the non-success of Subway in Austria: Sandwiches just aren’t as popular in Austria as they might be in other countries (for example in the USA). Of course, Austrians like to eat sandwiches every now and then but they just aren’t such a consistent part of the everyday diet as they may be in other cultures.
July 8, 2022 @ 10:08 am
As an Austrian, I’m not surprised that Subway doesn’t do particularly well on the Austrian market, because Austrians value regionality and high food quality. The reputation of U.S. fast food chains in particular is not the best in Austria. For example, they are often perceived as very unhealthy, too greasy and too salty. As for Subway, people in Austria do like to eat sandwiches, but not the American way. We love our sourdough bread with cream cheese, ham, fresh vegetables, etc. The concept of being able to make your own sandwich was not bad in general, but the ingredients for the sandwiches are just not fresh and Austrian enough. In addition, there is the lawsuit, in Austria it is not common to sue anyone you don’t like. This is very American and in Austria not seen favorably. So they have made it even worse, simply a disaster.
July 8, 2022 @ 2:45 pm
I think the question is, is Subway really needed in Austria? From my point of view it is not really necessary to pursue Subway in Austria.
People here are more likely to look for regional food. McDonald‘s for example promotes the austrian potatoes or the austrian meat which is used for their burgers. Another aspect probably is that the people are more likely to buy sandwiches in super markets like spar or in bakeries where they also have fresh bread, which makes it even harder for Subway to have success.
Another point to note is, that Subways advertising strategy reaches significantly fewer people than that of other chains. Other chains are also better known on the county side,while Subway for sure is not the first thing that comes into peoples mind when they think of a fast food chain.