Subsequent to menu adjustments that analysts view as primarily driven by cost reduction rather than taste preferences, Subway outlets in India will no longer provide the complimentary cheese slice option with their sandwiches.
As a major player in the Indian restaurant franchising scene, the American chain Subway boasts a network of approximately 800 outlets. In a recent development, they have introduced an additional charge of INR 30 ($0.40) for the inclusion of a cheese slice in the majority of their sandwiches. However, as an alternative, they are now presenting customers with a complimentary option of a “cheezy” sauce.
The escalation in ingredient prices, encompassing dairy products, has exerted pressure on global fast food chains in India to manage costs while ensuring customer contentment.
In India, Domino’s has set a promotional price of only 60 U.S. cents for its most affordable pizza. However, the franchisee in the region has openly expressed apprehensions about a significant 40% increase in the cost of cheese during the fiscal year that concluded in March.
In recent weeks, numerous Subway and McDonald’s establishments in India have opted to exclude tomatoes from their menus, attributing this decision to concerns regarding quality. This move follows a staggering price surge of approximately 450%, leading to all-time high costs for tomatoes.
Also Read: McDonald’s in Delhi grapples with tomato crisis, temporarily removes tomatoes from offerings
To address the scarcity, India has turned to importing tomatoes from Nepal.
The cheese sauce now available for free at Subway India was “developed for qualitative reasons alone”, said Everstone Group’s Culinary Brands, which manages the supply chain for all 800 outlets and is the master franchisee for around 200.
The shift in quality is evidently not appealing to everyone’s palate.
Subway has “replaced the cheese slice with liquid cheese blend … You just lost a loyal customer,” one unimpressed customer, Sumit Arora, wrote on X, the social media platform formerly known as Twitter.
According to a store manager at a Subway outlet in New Delhi, the newly introduced cheese sauce is priced at INR 400 per kilogram. Market prices indicate that cheese slices typically carry a cost of around INR 700 per kilogram.
A cheese slice, said Culinary Brands’ marketing head Mayur Hola, “can be added on at a small cost”. “Ingredient costs are not something we comment on … this is simply an upgrade to make our subs better.”
When inquired about Subway’s decision, Karan Taurani, a consumer discretionary analyst at Elara Capital in India, explained that the surge in cheese, grain, and vegetable prices has compelled restaurants to devise “innovative” approaches.
“It is a way of putting inflationary pressure on the customer rather than going for a blanket price hike,” he said.
In India, the price range for a Subway sandwich typically falls between INR 200-300 ($2.4 to $3.6). However, should a customer opt to include the previously complimentary cheese slice, the cost will now be elevated by up to 15%.
Subway representatives did not provide a response to a comment request.
In the current week, the central bank of India revised its inflation projection for the ongoing fiscal year to 5.4%, citing increased pressures stemming from food prices.
