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Fast-Food Sandwiches Are a Hot Item on the Menu

Posted on: Thursday, 4 August 2005, 18:00 CDT

Aug. 4--Fast-food sandwiches are hot these days.

They're healthier, says Jon Sanders, 29, who drives a delivery truck in Tacoma.

On Wednesday, Sanders sat in the cab of his truck, wearing shorts and sporting Oakley-like sunglasses as he chomped on a Subway sandwich.

Subway and Quiznos -- the No. 1 and No. 2 sandwich shops in the nation, not counting burger places -- saw sales hit $7.5 billion last year.

"I like them both," Sanders, who picked up his sandwich at a Subway across the street from Wright Park, said of Subway and Quiznos. "Where I eat just depends on where I am in my delivery route. I don't count calories or anything, but when lunch is over, I need to be back at full-speed and I just can't do that on burgers and fries."

Industry analysts say Subway and Quiznos are locked in an unusual competition. Like McDonald's and Burger King, they compete for the same market. But they also share a common goal: luring customers away from the burger joints.

Nowhere is that clearer than on Subway's monthly sales charts, which frequently are unaffected even after a Quiznos opens nearby, said Fred DeLuca, Subway's founder and president.

"How can that be?" DeLuca asked. "Where did all the sandwich customers come from?"

The answer, he said, is that despite the presence of 18,000 Subway restaurants nationwide, the sandwich market remains underserved. Quiznos and its line of hot subs are bringing new customers to the market, which in turn benefits Subway. Subway added hot sandwiches in November.

On Wednesday, Linda Chapman, 44, and her 15-year-old daughter, Michelle, shared a toasted mesquite chicken sandwich and broccoli cheese soup at Quiznos while watching traffic zoom past on South 38th Street in Tacoma.

"Honestly, we used to eat as many hamburgers as everybody else," she said. "But ever since (Michelle) saw that movie about the guy eating at McDonald's every day, she acts like a hamburger will kill her."

Nationally, Subway credits part of its 11 percent average annual growth over the past three years to Quiznos' emergence.

"If they never existed, our overall growth probably would be slower," DeLuca said.

Denver-based Quiznos, too, benefits from the competition.

"The sandwich-segment boom is based on health-conscious people perceiving sandwiches as better for them than burgers or fried chicken," said Dominick Voso, executive vice president of development for Quiznos.

For years, Subway has delivered that message through Jared Fogle, the company icon who lost 245 pounds eating sandwiches.

Quiznos, meanwhile, has struggled to establish brand identity -- even though its name was devised because it contained both a q and z, the two least-used letters in the alphabet, in a bid to be unique and memorable. Quiznos' early advertisements bordered on the bizarre: singing rodentlike characters, a man suckling on a wolf's teat and people getting shot with tranquilizer darts. Tom Ryan, the vice president in charge of crafting the Quiznos brand, said those early ads generated buzz. As Quiznos has matured, he said, the marketing has increasingly focused on sandwich quality.

Beyond advertising, Quiznos and Subway also have embraced different business models and growth strategies.

Now marking their 40th year, Subway franchises are designed to run inexpensively with a small staff and can be built into gas stations and convenience stores.

"Quiz has better food and more choices, but if I'm counting change it's the Subway down the street," said Laura Gonzales, 22, a nail technician in a Tacoma strip mall on 38th Street.

One of the mall shops is a Quiznos, and a variety of fast-food options including Subway are within a two-block radius.

Quiznos offers slightly more expensive food in larger, breezier shops. Quiznos executives say they're blazing new ground, marketing the company as a higher-quality alternative to fast food that's not as expensive as eateries known as fast casual restaurants.

Gay White said she knew the company was onto something good the first time she tried its sandwiches a few years ago in Tacoma.

"After eating some sandwiches with my husband, I told him, 'This is really good. We need to be a part of this,'" White said.

She's now the owner-manager of the Quiznos in Tacoma's Lincoln Plaza.

SANDWICH KINGS

SUBWAY:

--Franchises: More than 23,000 in 82 countries, with 18,000 in the United States, including 31 in the Tacoma area

--2004 U.S. sales: $6.27 billion

QUIZNOS:

--Franchises: 3,339, including 10 stores in the Tacoma area

--2004 sales: $1.27 billion

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Copyright (c) 2005, The News Tribune, Tacoma, Wash.

Distributed by Knight Ridder/Tribune Business News.

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MCD,

Source: The News Tribune

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