About a month ago, the weekly circular for the New York Metro-area Pathmarket supermarket chain started running specials on Subway-branded deli meats and cheeses. The specials were in the Deli section of the circular. People on this forum have never raved about the quality of Subway’s meats and cheeses. That is why I was surprised at the high prices of these luncheon meats (even on sale), often higher than those of Boar’s Head, Dietz & Watson, Thumann’s, etc. at competing supermarkets. Last week they were featuring Subway turkey breast at $6.99 a pound and American cheese at $5.99 a pound. This week they are featuring Provolone cheese and Genoa salami, both at $6.99 a pound. Regular prices are $1-$2 a pound higher. Now, it is well known that Subway does not give territory protection to their franchisees but I know of shopping centers that have both a Pathmark and a Subway sandwich shop. So this raises the question – is this head-to-head competition?
The first question in my mind was the same as the Nathan’s hot dog question – is the hot dog sold in supermarkets the same as served at Coney Island? So, I figured I’d see what was being said in the trade rags. I found if you google Subway and Pathmark, you get the best hits. Seems Smithfield Packing or whatever they are called these days was looking to launch a new line of luncheon meats, so they decided to pimp Subway. Are the cold cuts the same in sub shops and supermarkets? I found this weasel statement in a press release:
"Smithfield Deli Group is committed to producing the same high-quality, delicious, fresh, and healthy products as are offered at Subway restaurants nationwide," said Richard Goodman, s.v.p. of Smithfield Deli Group, in a statement.
I never got to try any, since my visits to Parhmarks in the last month were always late at night after the deli department closed. If the supermarket-branded cold cuts are indeed different, we will start having to use the terms "supermarket Subway" and "sub shop Subway" in our discussions.
As the trade rag articles state, these are being test marketed for a year. The Subway web site says nothing about their new source of income.
The meats and cheeses will not just be available in the New York metro area. Smithfield said it plans to expand the test to other U.S. grocers and mass retailers during the first half of 2007.
I wonder how the Subway franchisees feel about even less territorial protection than they have now.