Business Week On Subway's $5 Footlong Success

Fascinating article in Business Week this week about Subway's stumbling into the goldmine that is their current $5 footlong sub deal — a promotion that started as a lark at an “obscure Miami franchise” and has grown to give the chain $3.8 billion in sales. This is the kind of story professors use as case studies in business school.

Coincidentally, about the same day the article came out, I was also drawn to the cheapness. Because it's really all about the cheapness, isn't it? But frankly, I quite liked my Spicy Italian. The article is correct though: $5 is “the magic number” for the sandwich. And also, like the story mentions, I took the other half and ate it for dinner after crisping it up further in the toaster oven.


But more interesting to me, other than the $5 footlong signs, were the signs that explained which sandwiches are subject to taxes and which are not. Cold sandwiches are taxable if you eat it in the store, but not if you take it out. Hot sandwiches or any cold sandwich which gets toasted are taxable regardless of whether you eat in or out.  It's like a lesson on tax law while you're standing in line.

Of course, I can't talk about sandwich deals without mentioning Little Saigon and its banh mis, which have always been cheaper than Subway, and still is. At my go-to banh mi joint, Banh Mi Che Cali, you can get a third hoagie-style banh mi free when you buy two for $2.50. Or if you just bought the footlong baguette sandwiches, it's just $2.25 for one. And if you lined them up end-to-end, that's at least 1.5 feet, maybe even 2 feet, of sandwich, all at or below $5 (tax included).

And this is *AFTER* Banh Mi Che Cali had a recent price increase! Plus, there's the “che” part of the name, which if you didn't already know, means dessert. Even those are bargain priced: 3 tubs for $3 last I checked.

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