Starbucks now ranks as the second-largest restaurant chain globally, overtaking Subway. Last year, Starbucks edged past Subway, with Technomic's data showing Starbucks at 38,587 outlets worldwide versus Subway's 36,516.
Subway, previously leading in global locations, has seen a downturn. It shut down 6,000 U.S. stores from 2015 to 2021. Meanwhile, Starbucks expanded, opening nearly 3,000 new stores.
McDonald's holds the top spot as the largest chain, boasting 41,822 outlets. A significant portion of these, about one-third, are in the U.S. Last year, McDonald's sales hit approximately $120 billion.
Despite falling behind globally, Subway still dominates the U.S. market in terms of locations. It has 20,000 restaurants nationwide, outpacing Starbucks and McDonald's, which have around 15,000 and 13,000 U.S. locations, respectively.
Starbucks has not only overtaken Subway in the number of global outlets but also in annual sales. It leads by several billion dollars, even though Subway has about 25% more U.S. locations.
Starbucks' growth trajectory has been impressive, reflecting a broader trend in consumer preferences. The coffee giant has successfully capitalized on the global coffee culture boom, introducing a wide range of beverages and food items that appeal to diverse tastes.
Its strategy includes expanding into new markets, enhancing the customer experience through technology, and innovating its product line-up. Starbucks' commitment to sustainability and social responsibility has also resonated with customers, further bolstering its brand appeal.
On the other hand, Subway's decline can be attributed to several factors. The sandwich chain has faced intense competition from a plethora of fast-casual restaurants offering fresher, more customizable dining options.
Challenges in maintaining consistent quality across franchises and a failure to innovate its menu in meaningful ways have also hindered its ability to retain and attract customers. The brand's image suffered from negative publicity, further complicating its efforts to rejuvenate its market position.
The contrasting fortunes of Starbucks and Subway highlight the importance of adaptation and innovation in the fast-paced restaurant industry. While Starbucks continues to ride the wave of its strategic initiatives, Subway faces the task of reinvigorating its brand and reclaiming its competitive edge.
The ability to respond to changing consumer behaviors and preferences remains critical for any brand aiming to sustain and grow its market share in the dynamic food and beverage sector.
