The Home Team examines two competitive moves that put enormous pressure on Quiznos: Subway introduced toasted sandwiches across its system and later launched the famous $5 Footlong. Together, those moves attacked both Quiznos' differentiation and its premium pricing.
Subway began rolling out toasted sandwiches in 2004, years before the $5 Footlong. Its national $5 Footlong promotion launched March 24, 2008, just as consumers were becoming increasingly value-conscious during the financial crisis and recession. Toasting had been central to Quiznos' identity, including its “Mmm...toasty” positioning. Once Subway installed ovens throughout its much larger restaurant network, Quiznos lost part of the product differentiation that had helped distinguish it from its biggest sandwich competitor. The $5 Footlong became a massive success. Subway's U.S. sales reportedly increased about 17% in 2008, and Restaurant Business says the promotion helped accelerate Quiznos' decline because its financially strained franchisees had difficulty competing through heavy discounting.
