Retail

No Major Retailer Has More Locations Than This One

Douglas A. McIntyre

Published: July 7, 2019 5:52 am

Last Updated: January 11, 2020 8:03 am

The National Retail Federation has announced its Top 100 Retailers for 2019. Walmart was the biggest in sales, at $387 billion. It has 5,263 locations. One company on the list had many times that.

Most large retailers have fewer than 4,000 locations. Some of the largest, like Costco and Apple have far fewer than 1,000. Dollar General with 15,472 and Dollar Tree with 15,012 are the largest traditional brick-and-mortar retailers by a significant margin based on store count. However, they are well short of Subway, which has 26,932 and that puts it at number one on the Top 100 Retailer list. And Subway bests its largest rival McDonald’s. McDonald’s has 14,155.

What Subway does not have is a lot of revenue. Among the 100 largest retailers, it ranks 43th by that category. Its total sales in 2018 were $10.4 billion, which means its revenue by location is extremely modest.

Subway has been in real trouble recently. It closed over 1,000 stores last year. CNN reported that among the major reasons is that other fast-food chains have added healthy menu items. And healthy food was a major foundation in Subway’s success. CNN reported that “McDonald’s bought a tech startup that will help improve mobile ordering. Chipotle (CMG) is redesigning stores and its menus. Panera completely revised its breakfast options. And the whole industry has begun offering healthier food options and digital kiosks for faster orders.” Subway is being crowded out of its own market.

To make matters worse, a number of Subway franchise owners have accused the company of trying to put them out of business, one by one. Among the tactics, these owners contend, it trying to shutter them for small issues, like how vegetables are cut and whether windows are clean. Press reports of the practices have caused the fast-food company public relations nightmares.

There is growing evidence Subway will need to close more stores. Industry experts say its location count is the smallest it has been in almost a decade, and that the company’s revenue continues to fall. And it may face employee retention problems because it is one of the lowest-paying companies in America.