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Tuesday, Mar 19, 2024
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Subway Café Wants You to Have a Coffee, and Sit for a While

San Diego recently became home to the first two California locations of Subway Café, a new format through which the ubiquitous sandwich chain is looking to take on Starbucks Corp. and major restaurant rivals nipping at the coffee king’s heels, led by McDonald’s.

The shop that opened Nov. 16 on Washington Street in Mission Hills — like the one that debuted in September in the Gaslamp Quarter — aims to capture an upscale coffeehouse ambience. The restaurants are about 300 square feet larger than a standard Subway, with an expanded menu of coffees including espresso drinks, blended beverages and lattes.

More Than Munchies

There’s an array of baked goods, with free Wi-Fi service and DirecTV.

“This has been a natural extension of the fact that people are getting more accustomed to coming to Subway for breakfast items,” said Rohit Marwaha, development agent for Marwaha Group, a San Diego County franchisee of Subway. “The demographics for this in San Diego are also very good.”

The café concept was first tested three years ago in Virginia and has since been tried out by other Subway franchisees, and there are now about 20 locations nationwide. Marwaha said the local franchise group is scouting the San Diego region for potentially several more café sites, along with other California counties where the firm has franchise rights.

He said the Gaslamp Quarter, for instance, has a strong mix of local residents, office workers and tourists to keep his company’s new 24-hour Sixth Avenue location busy throughout the day. So far, Marwaha said the new café eatery, which opened in a renovated former retail store space, is not cannibalizing sales at his company’s regular Subway located just two blocks away.

“There are a lot of offices there, and a lot of people at conventions who are visiting,” Marwaha said. “This is attractive because it is set up as a place where people can stop by and have a coffee and some food in a more relaxed type of a café setting.”

According to the restaurant industry consulting firm Technomic Inc., traditional fast-food restaurants are increasingly moving toward breakfast and café offerings to drive traffic beyond the lunch and dinner periods.

Erik Thoresen, a research and consulting director at Technomic, said the café format helps Subway offer “a different look and feel” at some of its locations, while making the restaurants more like social hangouts to encourage loyal repeat business.

The industry changes also tap into a wave of websites and tech offerings, like the meet-up site GrubWithUs, that have brought new levels of socialization to the dining world.

Social Settings

“In several ways, these format upgrades and online platforms are making many restaurants more social than in the past,” Thoresen said.

Owned and operated by Connecticut-based Doctor’s Associates Inc., Subway is the world’s largest restaurant chain by location count, with its 35,000 global eateries generating more than $16 billion in 2010 sales.

Subway is also among several national dining chains recently touting western expansion efforts in the U.S., with San Diego County among priority markets. Others include Qdoba Mexican Grill, a division of San Diego-based Jack in the Box Inc., as well as Chipotle Mexican Grill, Popeye’s Louisiana Kitchen, Panera Bread, Burger King and several other burger purveyors.

The Gaslamp Quarter recently saw the debut of the first-ever IHOP Express, operated by Glendale-based International House of Pancakes LLC. The format is a fast-casual version of the company’s full-service restaurants, with an emphasis on portable options for customers on the go.

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