Subway eyes matching McDonald's in 10 years

08:42, March 10, 2010      

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US sandwich chain Subway hopes to match McDonald's in China in terms of total stores within 10 years, Subway president Fred DeLuca said Monday.

DeLuca, who founded Subway in 1965 at the age of 17, said China had great growth potential and his company targets 500 additional restaurants there in the next 5 years, with 35 to 50 set to open this year.
"If we accomplish that, then maybe in another five years we may be able to match McDonald's store count," DeLuca said.

The two chains are currently neck and neck in total stores worldwide, with about 32,000 each.

He added that Subway was looking particularly at second tier Chinese cities for expansion as major ones such as Beijing and Shanghai had already built a good foundation.

"Our biggest challenge is getting customers to try the product," DeLuca said, adding that lowering prices are consid-ered to attract more customers.

A standard Subway six-inch sandwich costs around 20 yuan ($2.93) compared with 6 yuan for a burger at McDonald's.

Subway has 150 stores in China compared with more than 2,000 McDonald's.

Subway's emphasis on fresh eating and vegetables will help the franchise chain grow as Chinese consumers look for healthier options, DeLuca said.

Subway's China stores account for 0.5 percent of its global network, with markets such as the US, Canada, Australia and the UK making up the bulk of revenue.

As Subway expands into China's different provinces, it plans to localize the menu to suit local palates.
David Keir, Subway's development agent in Shanghai, said Subway has done trial research, testing sandwiches such as Beijing roast duck and local sauces such as "hot and spicy Sichuan sauce."

The trials echo what Subway's peers are tailoring to the market with robust potential, including coffee giant Star-bucks' refreshed tea-inclusive menu and the rice set meals at chicken chain KFC.

Source: Global Times
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