PESTEL analysis of Subway

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PESTEL analysis of Subway

This is a detailed PESTEL analysis of Subway. Subway is an America fast food restaurant, headquartered in Connecticut, the USA. It operates in 111 countries in the world and comes under different socio-political and legal systems. The purpose of this article is to examine how Subway is affected by these factors, with particular references drawn from the UK, the EU and the USA.

Political factors that impact on Subway

There is no doubt that certain political factors impact on businesses. For example, the UK and EU are going through some changes due to the UK’s decision to leave the EU. This leave known as BREXIT has created uncertainty; however, the new deal reached recently between the two is seen somewhat positive by many.

It is worth mentioning that organisations may have to review their supply chains if products/raw materials are to be transported into to the UK from the EU countries and vice versa. Many British organisations have already started doing that (Eley and Thomas, 2021). As long as the USA is concerned, many people are concerned about the political direction and climate that may impact on businesses badly.

Economic factors that impact on Subway

The Recession (started in 2007) in the USA impacted on businesses in the UK, USA, and many other countries, and Subway was not immune from it. However, things have changed over the years. Subway has seen an increase in revenue due to increases in disposable income in some countries.

Subway’s sales went down badly in 2020 because of global lockdowns. Economic factors e.g., disposable income of customers, unemployment, and minimum wage have all been at play concerning the restaurant’s decline in sales.

Social factors that impact on Subway

The next point to discuss in the PESTEL analysis of Subway is the social environment. Two important social factors out of many are discussed here. Firstly, let us look at the lifestyle of people in general in the UK, the USA, and the EU. Many people work both full-time and part-time and often do not cook at home. Consequently, they rely on restaurant foods. This lifestyle is great for Subway from revenue generation point of view.

Secondly, SUBWAY must comply with religious rules in certain countries. For instance, it must provide Halal meat in Muslim majority countries. Even though, there is no pressure from the governments, Subway offers Halal food in many restaurants in the UK, the USA, and the EU.

Technological factors that impact on Subway

Subway is very active in social media to promote its image. It has its own loyalty card ‘Subcard’ to encourage customers to make repeat purchases. Without advanced technology, it is not possible to offer the royalty card to customers. Likewise, the restaurant uses cash register data to collect and determine royalty fees from the franchisees.

Many customers criticise Subway because of its low adoption of technology. However, the restaurant has recently taken a number of tech initiatives. For instance, it launched ordering food on Facebook Messenger in 2017. Likewise, it is also expanding its delivery options partnering with Uber Eats, Grubhub, DoorDash and Postmates (Kelso, 2018).

Environmental factors that impact on Subway

Local, national, and international environmental rules and regulation impact on Subway like any other organisations. Changing rules and regulations are pressing organisations to take a more sustainable and greener approach. Subway has been working with farmers and other relevant stakeholders to improve practices that preserve natural ecosystems and water availability globally (Subway, 2021).

Legal factors that impact on Subway

Subway must comply with the rules of the land wherever it operates. Packaging, food hygiene, food quality and nutritive values are the major areas affected by law. However, different legal systems put varying degree of emphasis on these issues. For example, food hygiene rules are very strict in Europe and the USA. However, these rules are not that strictly applied in some countries.

We hope the article PESTEL analysis of Subway has been a useful read. You may also like reading PESTEL analysis of ASDA, SWOT analysis of Subway and SWOT analysis of McDonald’s. If you liked this article, please share it by clicking on the icons below.

Last update: 08 January 2021

Further reading/references

Eley, J., and Thomas, D. (2021) UK retailers stumped by post-Brexit trade deal with EU, available at: https://www.ft.com/content/049bf6b6-012a-4798-9e58-7c2456047d1b (accessed 08 January 2021)

Kelso, A. (2018) Subway’s Digital Initiatives Show The Chain Is No Longer ‘Slow To Innovate’, available at: https://www.forbes.com/sites/aliciakelso/2018/11/13/subways-digital-initiatives-show-the-chain-is-no-longer-slow-to-innovate/?sh=5064cebb3526 (accessed 08 January 2021)

Subway (2021) About us, available at: http://www.Subway.com/en-us/aboutus (Accessed 01 January 2021)

Author: Joe David

Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.