Ingredients Are Higher Quality and More Labor-Intensive
Produce needs proper storage, frequent deliveries before spoilage and daily prep while meats and cheeses require meticulous portioning. Even when outsourcing chopping and deliveries, inventory management carries a price tag.
For example, high-volume items like tomatoes run $1.25-$1.50 per pound for normal round slicing tomatoes. By comparison, grape tomatoes or tomatoes on the vine cost $3+ per pound – 2 to 3 times more for specialty varieties.
Subway aims for consistent sizing, so tomatoes get hand-cut to proportions matching menu photos. This added labor doubles worker time versus throwing full tomato slices straight on a burger at McDonald‘s.
Taking into account trimmed waste and effort for uniform sizing and presentation, Subway‘s ingredient rigor carries real expenses. But in return, customers enjoy reliable ingredient proportions and accuracy in orders – a worthwhile value tradeoff.
Expand this analysis for additional produce items, meats and baked goods. Provide data on costs over time and versus other chains.
Positioning Among Fast Food Competitors
In distinguishing itself in the market among giant QSR chains…
Discuss Subway‘s brand image, messaging, competitive threats from newer rivals, how pricing fits into the business model and necessary margins amidst today‘s rising costs in the restuarant industry.
Granular Cost Breakdown in a Typical Order
Using a Six-Inch Sweet Onion Chicken Teriyaki sub as an example…
Provide cost calculation at each ingredient/processing step compared to cheaper meats and addons. Analysis would showcase higher priced but better quality proteins, specialty baked breads, and custom toppings add up incrementally to be 20-30% pricier. But combined with loyalty incentives and combo discounts, strong overall value retained.
Additional examples comparing customization costs to combo meal deals at other chains. Calculate $ per calorie as common unit of comparison.
Third Party Delivery Services Increase Cost Pressures
In response to COVID impacts accelerating mobile ordering adoption…
Expand on how delivery partnerships with DoorDash, UberEats and GrubHub carry fees and service costs that eventually influence menu pricing decisions as digital channel mix grows over time.
