Subway has embarked on significant leadership changes, announcing the exit of CEO John Chidsey effective at the end of the year. This decision marks another turnover at the top of the fast-food industry, which has seen its fair share of shake-ups amid competitive pressures.
Chidsey, who assumed leadership of the largest sub sandwich chain in 2019, played a pivotal role during his tenure, steering Subway through negotiations, including its recent sale to private equity firm Roark Capital for over $9 billion. During his time, he emphasized strategic promotions and meal deals aimed at revamping Subway's customer engagement.
While Chidsey departs the chief executive role, he will remain on as a consultant, focusing on international expansion efforts. Subway has ambitious plans, already committing to add 10,000 new locations, many of which are set to be established abroad, as reported by The Wall Street Journal.
Taking over the reins temporarily is Carrie Walsh, Subway's president for Europe, the Middle East, and Africa, as well as the former chief marketing officer. Her background includes key roles at prominent brands like Michaels, Pizza Hut, and PepsiCo, bringing extensive experience to the position. Walsh is tasked with guiding the company as it seeks to establish its next permanent leader.
This leadership change is not isolated. The fast-food sector has recently witnessed transitions at several major players, including Starbucks, Shake Shack, Papa John’s International, and Wendy’s, all struggling to attract cash-strapped customers dealing with inflation and rising costs of living.
Companies like McDonald’s have responded proactively by rolling out promotions, such as the successful $5 Meal Deal, which has won favor among budget-conscious diners. Notably, McDonald’s has committed to extending this value meal through the first half of 2025 and has introduced new offers, including “buy one, add one” deals during peak hours.
Subway, on the other hand, has faced challenges with some of its promotions. Recently, it announced the discontinuation of its $6.99 sandwich meal deal after it failed to generate sufficient interest. Instead, the company is limiting the deal to online orders through December 26, along with offering a 20% off coupon through their app as part of its new marketing strategy.
Chidsey's legacy includes fostering international growth and improving existing US stores. His initiatives involved enhancing the menu to attract more customers and moving significant executive operations to Miami, showcasing his commitment to innovation within the brand.
Despite his differences with existing franchise operators over operational decisions, such as introducing high-end equipment and honoring digital coupons, Chidsey's leadership saw Subway's US sales rise 2% last year, according to market research from Technomic.
Interestingly, Subway's competition appears to be ramping up. Jersey Mike's, another sandwich giant, just secured funding from Blackstone, valuing the company around $8 billion. This development is particularly notable as it places Jersey Mike’s valuation close to Subway’s recent sale price, showcasing burgeoning interest and potential for both brands to expand.
With Chidsey's departure, Subway is at yet another crossroads. Can Carrie Walsh successfully navigate the tumultuous waters of fast-food leadership and bolster Subway’s position against its competitors? Amid fluctuated consumer preferences and economic pressures, the fast-food industry's future remains to be seen, as the competition heats up for providing value to increasingly cost-sensitive customers. All eyes will be on Walsh as she steers Subway through this transition and works to uphold the company's reputation as one of the largest sub chains.
