Subway, the world’s largest fast-food chain, is struggling to adapt to more health-conscious, tech-savvy customers. So it’s rapidly downsizing.
Subway closed more than 1,000 restaurants in the United States last year — way more than it originally planned.
The company’s net closures include new Subway stores that it opened last year, which means the number of closed Subways is even larger than the company is letting on. The privately held company confirmed the number of net closures to CNN Business, but did not disclose the number of openings. The closures were earlier reported by the New York Post.
Subway started its restaurant purge in full force in 2016, when it had more US closures than openings for the first time in its history. It said it plans to keep closing restaurants as it tries to become more profitable.
“Our main goals are to drive guest traffic and grow franchise owner profits. Everything we do has to achieve these goals,” a Subway spokesperson said in a statement.
Subway said it would remodel or relocate many of the stores it plans to keep open.
Like its fast food rivals, Subway is aggressively redesigning its stores to adapt to the future. Two years ago, it announced plans to roll out self-order kiosks with mobile payment options, more comfortable seats and USB charging ports. Those store changes also placed a renewed emphasis on fresh produce.
Subway has roughly 24,000 stores in the United States, according to the company’s website. It has about 42,000 stores worldwide. That’s 17% more than McDonald’s (MCD), Subway’s closest competitor. McDonald’s has about 36,000 restaurants.
As consumer tastes change, fast-food and quick-serve restaurants have struggled to keep up. Starbucks (SBUX) and Burger King have redesigned and added drive-thrus. McDonald’s bought a tech startup that will help improve mobile ordering. Chipotle (CMG) is redesigning stores and its menus. Panera completely revised its breakfast options. And the whole industry has begun offering healthier food options and digital kiosks for faster orders.