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Liz Lee

The Star

Publication Date : 21-01-2013

Subway, the world's largest fast-food chain, intends to take a bigger bite out of the local fast food business, targeting a 22 per cent business expansion in terms of total outlets this year, with plans to reach into more states.

By the end of the year, the fast-food chain expects a total of 150 outlets nationwide. Currently, there are 123 Subway stores in Malaysia concentrated in the Klang Valley, Penang and Johor.

Subway president and co-founder Fred DeLuca told StarBiz the local business was growing at a rapid pace, with these three growth areas performing well.

“We will be going to other areas, but there are no concrete plans right now,” he said, adding that Subway's expansion was dependent on existing and new franchisees going into new areas.

“Now, we are pretty well-known in Malaysia, so I think there will be good reception almost everywhere.”

He added that Johor, the latest addition to Subway's widening footprint, had enjoyed surprisingly high sales.

“A lot of that was because of the publicity streaming in from two directions, not only from the advertisers in Kuala Lumpur but also from those in Singapore.”

On the Asian level, the Subway's business is also undergoing strong expansion. Singapore-based regional director Karen Eidsvik Moody said the group intended to grow an ambitious 10,000 stores by 2020, generating US$3 billion (9 billion ringgit) of sales.

Subway's Asia business is now worth $500 million, with 1,600 stores operating in the region. It enjoys a 29 per cent year-on-year revenue growth.

Globally, North America, Latin America and Europe remained the biggest markets for Subway International, in that order.

DeLuca said Asia was catching up very quickly, with its regional division optimistic of opening 600 more outlets this year.

“Last year was the biggest growth year we had in Asia, increasing at a rate of one store per day, making it 365 stores in total,” he said, adding, “But this year coming, Karen thinks it's going to be the biggest yet.”

He said China, India and Japan franchisee teams had grown well too. In 2012, the Subway chain increased by 2,500 outlets globally.

Subway overtook McDonald's as the biggest fast-food franchise in 2011. It is a privately-owned company by DeLuca and Peter Buck worth $17 billion in terms of global sales.