Subway now biggest U.S. restaurant chain

McDonald's still far outsells Subway, generating more than $40 billion, and surpasses the sandwich shop in global presence. The fact that there are more Subway restaurants in the country may be a boost in visibility for the chain, but it does not add up to huge financial gains, said Mark Kalinowski, a fast-food analyst with Salomon Smith Barney.

The Toronto Star
February 1, 2002

Subway now biggest U.S. restaurant chain
McDonald's, which still far outsells Subway, slides to second place

MILFORD, Conn. (AP) - There are now more places in the United States to buy a B.M.T. than a Big Mac.

Milford-based Subway Restaurants, the privately held chain of sandwich shops started by Fred DeLuca in 1965, has eclipsed McDonald's (NYSE: MCD)as the largest restaurant chain in the country.

The chain operates 13,247 stores in the United States, 148 more than McDonald's as of Dec. 31. Subway opened 904 units last year, while McDonald's opened 295.

"We knew that we were getting close to McDonald's, but we had to wait until McDonald's released its information," said Les Winograd, a Subway spokesman.

"We've been doing very well for the past few years and we generally open a large number of locations every year," Winograd said.

The numbers include satellite locations - shops at gas stations, schools, sports arenas and other smaller outlets.

Winograd said Subway usually doesn't include the satellites in the count, but wanted to make sure its numbers were comparable to fourth-quarter figures reported by McDonald's, which included satellites.

McDonald's spokeswoman Anna Rozenich declined to comment on the number of stores, but did point out that in 2001, systemwide sales rose to $40.63 billion from $40.18 billion.

McDonald's still far outsells Subway, generating more than $40 billion, and surpasses the sandwich shop in global presence. The fact that there are more Subway restaurants in the country may be a boost in visibility for the chain, but it does not add up to huge financial gains, said Mark Kalinowski, a fast-food analyst with Salomon Smith Barney.

"If you have a person walking down the street or driving along in their car, they'll see more Subways. It's a convenience factor to have a lot of units open. But ultimately, from a financial perspective, it's not that big of a deal," Kalinowski said.

But McDonald's and Subway are still far behind the world's largest restaurant company. Tricon operates 30,326 Kentucky Fried Chicken, Pizza Hut and Taco Bell locations worldwide.


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