PESTEL analysis of Subway

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Many of you already know that Subway is one of the biggest fast food restaurants in the world. It operates in 112 countries  and comes under different socio-political and legal systems. The purpose of this article is to examine political, economic, social, technological, environmental and legal factors affecting Subway, with particular references to the UK, EU and USA.

Political factors (in the PESTEL analysis of Subway)

We all know 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. New rules and regulation may be introduced offering challenges to Subway and other companies.

Economic factors (in the PESTEL analysis of Subway)

The Recession (started in 2007) in the USA has 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. There are other economic factors which affect the restaurant e.g. unemployment, tax rate, and minimum wage.

Social factors (in the PESTEL analysis of Subway)

We will consider two important social factors out of many in this section. Firstly, let’s look at the life styles of people in general in the UK, USA, and EU. Many people work full-time/part-time and often do not cook at home. Consequently, they rely on restaurant food. This life style is great for Subway from revenue generation point of view. Secondly, Subway has to comply with religious rules in certain countries. For instance, it must provide Halal meat in Muslim majority countries. Even though, there is no pressure for the governments, Subway offers Halal food in many restaurants in the UK, USA, and EU.

Technological factors (in the PESTEL analysis of 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 Subcard to customers. Likewise, the restaurant uses cash register data to collect and determine royalty fees from the franchisees.

Environmental factors (in the PESTEL analysis of 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.

Legal factors (in the PESTEL analysis of 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.

We hope this article has helped you explore the PESTEL analysis of Subway. 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.

The article publication date: 06 January 2018

Further reading/references

Johnson, G., Scholes, K. and Whittington, R. (2006) Exploring Corporate Strategy: Text and Cases, 7th Edition, UK: Prentice Hall

Subway (2017) About us, available at: http://www.Subway.com/en-us/aboutus (Accessed 20 December 2017)

Photo credit: www.pixabay.com

Author: Jo David

Jo David has years of 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.