Subway – Are We Paying More Dough for Less Dough?
On January 18th of 2013, a teenager in Australia ordered what he thought was a 12 inch “Footlong” sub from the international organization Subway Restaurants (Subway). The teenager proceeded to take out a tape measure and measured the sandwich at an even 11 inches. The young Australian man went home and proceeded to post his experience on Facebook and a request to Subway to “please respond.” The post instantly went viral with over 100,000 likes. Subsequent to the posting, Subway Australia immediately posted on their Facebook page that the term Footlong is a registered trademark as a descriptive name and not intended as a measurement of length. A Subway spokesperson was also quoted on ABC News that Subway strives for a 12 inch sub every time. However, contrary to the spokesperson’s statement, Subway did run a series of commercials in 2008 promoting their sandwich using a 12 inch ruler. In a short period of time, the issue grew on an international scale. People across the globe were posting on Facebook and Twitter similar experiences as those of the young man in Australia. A New York franchise owner even went to the extent of publically stating that the meat within the sub has shrunk an additional 25 percent and franchise costs for food products have increased 4-5 percent. Outside of the Subway spokesman, no other company comments were released immediately following the high-level exposure which was gaining momentum across the globe. Apparently, Subway leadership was under the impression the issue would “go away,” despite the high intensity viral exposure and the continued light on the issue. Within a few days, two New Jersey men filed a lawsuit, with a third man joining a couple days later. A man in Chicago is also filing a lawsuit in excess of $5 million and the New Jersey lawyer representing the original two men has stated that he is also filing a class action suit and moving into Pennsylvania to gather others with similar complaints. On the 25th of January, exactly one week after the posting of the young man in Australia, the filing of the lawsuits, coupled with the possibility of future lawsuits, Subway finally made a statement. The organization apologized and regrets falling short to deliver on their promises to their loyal customers. 2010 statistics show the fast food industry generates an excess of $180 billion annually, has over 300,000 stores, and employs 3.9 million people. Subway has been credited as a market leader within the industry with their relatively low start-up costs and capital expenditures. Their annual revenues exceed $6 billion, yet they have been highly exposed by not acting quickly on a major short-coming on delivering what has been their signature product. The leadership of Subway Restaurants needs to adequately address the “court of public opinion” in order to maintain brand credibility and corporate integrity as all stakeholders are watching. It is important for Subway to act swiftly, but what are the lessons learned beyond their inability recognize and respond to a difficult issue? What were the internal leadership shortfalls that impacted their ability to respond immediately? It is imperative that Subway maintain a sense of integrity and transparency in and around all of these issues because right now, consumers feel they are paying more dough for less dough.
