Robert Channick writes in the Chicago Tribune last week was the first week breakfast was on the menu at Subway, and the restaurant on Deerfield Road in Highland Park was indeed open hours earlier than previously. Two window signs touted a “better breakfast,” but no one was visible inside the dimly lit restaurant.
A tentative push on the door and the reassuring jingle as it opened startled owner Ajay Patel out from the back room, seemingly as curious as his potential customer.
“It’s not so busy in the morning,” Patel said, already baking bread for lunch. “Perhaps we need some more advertising.”
Certainly it is going to take some convincing for fast-food patrons to think of Subway as anything but the place with the “five-dollar foot-long” sandwiches, as their incessant advertising reminds. The privately held chain of 25,000 restaurants in the U.S. and Canada is stepping even more directly into the fast-food slugfest, where established foes such as Oak Brook-based McDonald’s, Dunkin’ Donuts and Starbucks compete for breakfast business.
This may not be a particularly great time to go after more consumer dollars, given the recession’s bite. Last year, breakfast sales at restaurants dropped 2.8 percent to $25.3 billion, with full-service restaurants taking the biggest hit, falling 6.7 percent, according to Mintel Foodservice in Chicago, which provides restaurant industry analysis. Fast-food sales were up slightly, about 0.5 percent.
The key is a longer-term shift in eating habits. Last year, more than 55 percent of breakfast restaurant sales were at fast-food chains, Mintel said. Sales apparently crossed the 50 percent threshold around 2004, meaning that for the past six years the majority of people craving bacon and eggs who didn’t want to cook went to someplace like McDonald’s. So why not at Subway?
“If we can get our core customers to make just one extra visit per week for breakfast, then we’re in a good place,” said Tim Ryan, owner of the Subway on Mannheim Road near the Allstate Arena in Rosemont. Open 24 hours, the 4-year-old restaurant is usually jammed after concerts and sporting events, but only a handful filtered in to try the new breakfast offerings one morning last week.
One of the diners was Ryan, who sampled his own promotional breakfast combo — an egg muffin melt and 16-ounce coffee that sells for $2.50.
Ryan said it wouldn’t take much traffic to make breakfast offerings profitable, which is a main reason Subway is going for it. The restaurants open at 7 a.m. insteady of around 10, but employees were often there that early anyway baking bread and preparing for lunch.
“All you really have is a little bit more labor and some food costs,” said Phil Mesi, who oversees development for more than 360 Subway franchises in Chicago and northwest Cook County. “Everything else is paid for, so you don’t really need much traffic to make this really work.”
Subway hopes some people will eat breakfast and order lunch at the same time, since the regular menu also will be available in the morning. Based on test market results, a few may even start their days with meatball marinara subs and other lunchtime items, company officials said.
“It’s an extension of what we’ve been doing all along, which is providing sandwiches,” said Les Winograd, a spokesman for the Connecticut-based company. “The breakfast day part is one of the areas where we felt we could do a better job.”
Read more at: Chicago Tribune
Related reading at DDIFO.org: Breakfast Wars: Burger King turns to Starbucks’ Seattle’s Best coffee and Subway to Introduce Breakfast Menu