Subway Is Up For Sale: What That Means For Your Next Sandwich
On February 14, made-to-order sandwich giant Subway announced it is now officially up for sale (via CNN). Of course, avid followers of the restaurant biz may already have suspected as much, as word on the street since early this year has been that Subway, a privately owned company, had already retained financial advisors to shepherd it through the process of attracting a buyer — most likely a corporate brand or private equity firm.
Indeed, more than one potential buyer may end up stepping forward with the intention to acquire the 58-year-old company. And an auction, which occurs when multiple offers are made, can be a seller's best-case scenario. What makes this so remarkable is that it's happening during a period of rising interest rates, which tend to increase the cost for corporate buyers to borrow money, thereby forcing sellers to accept a lower price.
Nevertheless, it's not lost on analysts that Subway's been on a "roll" these days, clocking positive same-store sales growth in every quarter throughout 2021 (via Bloomberg) and 2022. CNN posits that these recent triumphs are due to menu upgrades, including the current U.S. rollout of freshly sliced meats, as well as long-awaited store renovations and an ever-expanding international footprint. One could argue that Subway's been spiffing itself up for a sale for some time now. So, does this bode well for your next sandwich?
Subway's sandwiches already appear to be benefiting
Subway has hired financial services company J.P. Morgan to advise it throughout the process of courting potential buyers and formalizing an agreement by which the company could dispose of all its assets. That may be the last any of us hears about said process, since Subway said it intends to remain mum on further details until a deal has been finalized. However, this announcement could well be a harbinger of good things to come at Subway sandwich counters.
After all, in the lead-up to Subway's announcement, the company had already been making significant improvements to its menu and sandwich-making process. As noted above, Subway has very recently begun swapping out its pre-cut meats for freshly sliced and that's a difference savvy sandwich fans may notice immediately. Further, Subway's 2021 Eat Fresh initiative, as well as its summer 2022 rollout of its Subway Series Menu, have supported Subway's standing and its impressive rebound in the last two fiscal years, per CNN.
In fact, Subway's Tuesday announcement more than hints at its intention to continue along with what it describes as its "multi-year transformation journey." And that journey apparently includes the various changes Subway has been making of late to both its menu and "overall guest experience."