The demand for submarine sandwiches in the U.S. remains robust.
Despite its colossal scale, Subway faces competition from smaller rivals, highlighting the significance of location in the restaurant industry.
Placer.ai, a business location analytics firm, has observed the remarkable ascension of Subway’s competitor Jersey Mike’s Subs.
According to analysts, “Jersey Mike’s is swiftly expanding its franchise footprint, particularly in affluent suburban areas.”
Data provided by Placer.ai suggests that among its 2,000+ locations, Jersey Mike’s is resonating with an upscale customer base.
It is reported that 11.8% of Jersey Mike’s patrons fall within the “affluent, established couples in prime earning years residing in suburban households” category, as opposed to 8.4% in other sub-sandwich chains.
Furthermore, “affluent middle-aged families and couples” constitute 7.5% of its clientele, compared to 5.6% for other chains.
Also Read: Why Fast Casual Restaurant Chain Shake Shack Shares Are Shooting Higher Today
Jersey Mike’s, under the leadership of CEO Peter Cancro, is a private entity. On the other hand, Subway is under the control of private equity group Roark Capital Management. The possibility of Subway’s owner contemplating an initial public offering cannot be dismissed.
Meanwhile, in the fast-food segment:
- Shares of Potbelly Corporation PBPB surged by 20.5% in 2024. The chain has experienced a remarkable 125% surge since the commencement of 2023. Its recent interim results reflected approximately 6% sales growth and an average weekly sales figure of around $24,900. The company is scheduled to report its fully audited earnings next month.
- Shake Shack Inc. SHAK witnessed a 26% jump in its shares on Thursday and an overall surge of nearly 34% since the beginning of the year. Since 2023, the burger chain’s stock has soared by 139%. The fourth-quarter revenue stood at $286.2 million, reflecting a 20% increase and surpassing the consensus estimate of $280.3 million. Moreover, the company surpassed adjusted earnings of $31.4 million and expanded its net margin to 11% from 8.2%.
- Earlier this month, Chipotle Mexican Grill Inc. CMG reported a 15.4% surge in fourth-quarter revenue to $2.5 billion and a 27.3% rise in diluted earnings per share, exceeding Street consensus estimates. The operating margin also expanded to 14.4% from 13.6% a year earlier. Chipotle’s shares soared by 7.2% and have experienced a 14.1% surge year to date. Since 2023, the stock has climbed by 88.2%. Chipotle aims to expand its current 2,000+ locations in North America to 7,000 in the long run.
Comparatively, the Invesco Food & Beverage ETF PBJ, which houses both Shake Shack and Chipotle, has experienced a 1% decline since the commencement of 2024.
Performing marginally better, the AdvisorShares Restaurant ETF EATZ, encompassing all three of the aforementioned stocks along with other chains such as Domino’s Pizza DPZ, has surged by 2.3% this year and 29% since the initiation of 2023.
Now Read: Chipotle Mexican Grill Q4 Earnings Highlights: Revenue Beat, EPS Beat, Guidance And Unit Count Updates
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