Subway was in the news last week with the announcement that they have a $6.99 Footlong promotion through their app.
I took the opportunity to discuss one of the most well known fast food promotions of all time, the $5 Footlong campaign, which became an everyday price for almost nine years. And yet, the price promotion which Subway described as driving $4 billion in incremental annual sales when it launched in 2008, became so unpopular with franchisees that by 2018 when Subway briefly brought back the price point some franchise owners threatening legal action.
What happens when you make a promotional price point permanent? How do you manage moving beyond a well known “threshold price”? And what were the cost dynamics that turned this famous promotion sour?
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