Subway Closures Hit U.S. as Chain Shrinks Below 20,000 Stores
In a shocking turnabout for the fast food industry, Subway, the former standard-bearer for the biggest restaurant chain in the world, shuttered 631 locations in the United States in 2024, falling under 20,000 stores for the first time in nearly 20 years. That makes eight straight years of reductions, reflecting struggles at the world’s biggest restaurant chain by store count. The closings are part an ongoing strategic refocusing for Subway, which has been dealing with shifting consumer tastes, increased competition and higher operating costs, according to a recent CNN report.
Overhaul Itself as the Footprint Shrinks
Subway now has 19,502 stores in the United States, a far cry from more than 27,000 in 2015. It started early — in 2016 — with closures accelerating in the years that followed, including 1,601 in 2020 alone. The most recent round of 631 net closures in 2024 reflects a conscious move to rationalise the business. In a statement to CNN, a spokesman for the chain said Subway was optimizing its footprint with a “data-driven approach” that involved putting restaurants in the right locations, redesigning them and finding the right franchisees to run them.
That’s not just about closing doors. Subway is opening new locations and has begun to move stores as it adjusts to changing demographics and consumer tastes. The goal? A slimmer, more profitable network that delivers the same high quality experience for your customers.
So Why Are Subway Stores Shutting Down?
There are many reasons fueling this trend towards downsizing. Franchisees’ margins have been squeezed by rising costs — sparked by inflation and higher interest rates as well as increased labor expenses. For many, weighed down with debt or old leases, it is a struggle to survive. Meanwhile, competition from rivals like Jersey Mike’s and Firehouse Subs, coupled with a shift toward healthier, tech-driven dining, has also sapped away some of Subway’s dominance.
Consumer tastes have changed as well. A go-to option for fast, inexpensive subs, Subway is facing stiff competition as consumers look for fresher, more customizable meals. The chain has pushed back with menu innovations like the $5 footlong nachos and a “Fresh Forward 2.0” redesign that includes bright decor and self-serve kiosks. But for a few places, these improvements prove too little, too late.
Global Expansion Is the Silver Lining
Where the U.S. declines, there is a happier global narrative for Subway. With almost 37,000 restaurants globally, the chain has posted positive net growth outside the United States in each of the past two years. This growth illustrates a double-barreled story: one of a domestic market in distress juxtaposed with a strong international performance.
In the United States, Subway is still the number-one fast food chain by store count, ahead of Starbucks, which had 16,935 stores, and McDonald’s, with 13,559. But its $9.5 billion in system sales for 2024 is down 3.8% from the year before — a reminder that size does not translate into revenues.
What’s Next for Subway?
Analysts view the development as a potential turning point for Subway. The shutdowns, while worrying, are part of an overall “Smart Growth” strategy to work toward a more sustainable operation, the company said. Subway, looking to improve franchisee profitability and invest in digital tools and refreshed stores, aims to thin the ranks of underperforming stores. Early feedback on the Fresh Forward 2.0 prototype is promising, with guests and staff praising its new vibe.
Subway’s travels right now track broader changes in fast food. As pressures grow in a challenging economy and customers change their needs, the chain’s fate will depend on its capacity to change, or its inability to give up the ghost.
Source: CNN, “Subway keeps shrinking,” May 1, 2025
Disclaimer: This article is based on publicly available information and reflects the latest updates as of May 3, 2025. FinanceTract is not affiliated with Subway and does not guarantee the accuracy of future developments.
