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Subway may be the latest high-profile restaurant to make a big change amid industry-wide challenges.
The quick-service restaurant (QSR) is exploring a sale, valuing the company at more than $10 billion, The Wall Street Journal (WSJ) reported on Wednesday (Jan 11), citing unnamed sources.
“As a privately held company, we do not comment on ownership structure and business plans,” a Metro spokesperson said in an emailed statement to PYMNTS. “We are focused on moving the brand forward in our transformational journey to help our franchisees be successful and profitable.”
The sandwich chain has struggled over the past decade. The company’s American arm Sales of $9.4 billion in 2021, an increase of 13% in 2020, but will never match the peak of 2012, when global sales reached $18 billion, the report cited Technomic Research.
Subway may find now is an inauspicious time to look for a buyer, but tough economic conditions make investors hesitant to bet on the restaurant industry. Several news outlets have noted a slowdown in mergers and acquisitions (M&A) activity in the run-up to 2022.
Certainly, on the consumer side, there has been caution of late regarding restaurant spending. A PYMNTS survey of more than 2,100 consumers, “Consumer Inflation: Inflation Slows, But Consumer Outlook Remains Gloomy,” found that 78 percent eat more at home to save money amid inflation.
The report on the product’s potential sales comes as restaurants rethink their identity amid both industry-wide economic woes and ongoing changes caused by the pandemic. For example, Noma, a three-Michelin-star establishment in Copenhagen, Denmark, often rated as the world’s best restaurant, on Tuesday (Jan.
“By 2025, our restaurant is turning into a giant laboratory – a pioneering test kitchen dedicated to culinary innovation and the development of new flavors that will share the fruits of our efforts more widely than ever before,” said René Redzepi, Noma’s chef and co-owner. We have spent the last two years planning, and we are ready for the next several years to achieve our goals.
Meanwhile, some space players are taking the opposite approach by investing more in the industry. Restaurant Business announced Tuesday that the Olive Garden owner of Longhorn Steakhouse and several other large Darden restaurants is looking to bring in an additional brand while seeking a full-service restaurant (FSR) with high growth potential. Types of consumers.
“We will continue to watch,” CEO Rick Cardenas told investors in a report. “We’re only looking for a seller willing to sell at the price we’re willing to pay.”
Similarly, Nation’s Restaurant News reported Monday (Jan. 9) that fast-casual brand BurgerFi, which owns Anthony’s Coal Fired Pizza in addition to its flagship chain, is looking to add more brands to its portfolio, though CEO Ian Baines does not. Describe what brands.
Overall, the current economic climate seems to be prompting many major restaurants to ask tough questions about their future, though brands are divided on how to answer those questions.
PYMNTS Data: Why Consumers Are Trying Digital Wallets.
A PYMNTS study, “New Payment Options: Why Consumers Are Trying Digital Wallets,” found that 52% of US consumers will try a new payment method by 2022, with many choosing to try digital wallets for the first time.
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