Sub Shop industry at a glance
Annual Revenue: $18.9 billion
Profit: $1 billion
Annual rate of growth, 2007-2012: 4.3 percent
Projected annual rate of growth, 2012-2017: 3 percent
Employment: 473,000
Source: IBISWorld
A submarine sandwich war is making waves in the Miami Valley.
Three submarine-sandwich restaurant chains have targeted the Dayton area for expansion that could result in as many as 16 new sub shops over the next three to five years.
One of those chains — DiBella's Old Fashioned Submarines, which opened its first Dayton-area location in Washington Twp. last year — is scheduled to open its second Dayton-area location in Beavercreek on Thursday, and is planning one or two more.
Jersey Mike's Subs is building its second Dayton-area location, scheduled to open in Beavercreek this spring, and is looking to open three to five more locations in the next few years.
And Firehouse Subs will build as many as nine restaurants in the Miami Valley over the next five years, starting with its first location in Huber Heights this spring and a second in Oakwood in late summer or fall.
These medium-sized chains are elbowing their way into an already intensely competitive market. The Dayton area is already home to locally grown chains such as Submarine House, Super Subby’s and Milano’s Atlantic City Submarines, and to a growing number of franchise sub shops affiliated with the industry’s goliath, Subway.
There are also a handful of single-location independent sub shops, such as Stackers Subs & Grub in Belmont and Horton’s Hoagies in Washington Twp. And there is no shortage of pizza chains, delis and fast-food restaurants that offer the familiar torpedo-shaped sandwiches as well.
Miami Valley residents are not alone in their love for subs. During the past five years, the franchise sub-shop industry “experienced consistent and aggressive growth, despite a struggling economy,” according to a 2012 study conducted by IBISWorld, a Los Angeles-based independent industry research company. Revenue growth averaged 4.3 percent to $18.9 billion over that period, and IBISWorld expects average revenue growth of 3 percent a year for the next five years, to $21.9 million.
Employment at sub shops will jump from 473,000 in 2012 to a projected 529,000 in 2017, the research firm predicted. And the number of sub shops will rise from 34,000 to 36,000 over the same period.
Nima Samadi, senior analyst for IBISWorld and author of the company’s sub-shop industry report, said in an interview that he’s not surprised at the growing competition in the Dayton area. “People are seeing the success of existing sub stores, and they’re looking to jump on the bandwagon,” Samadi said.
Because of their ability to tweak their menus more easily than, say, a burger restaurant, sub shops are nimble and flexible enough to respond quickly to food trends. When low-carb diets became popular, sub shops switched to low-carb wraps, and with plenty of vegetable toppings and low-fat meats, they can credibly respond to the current healthier-food and low-fat trends as well, Samadi said.
Sub shops survived the recession well, and “will continue to benefit as the economy slowly improves, unemployment rates slowly move downward and consumers begin to spend money on luxuries like eating out more often,” Samadi’s report said.
The sub-shop franchise owners and developers who are putting together Dayton-area deals share Samadi’s optimism.
Charles Fryman, area developer for Jacksonville, Florida-based Firehouse Subs, said the brand has done so well in the Cincinnati-northern Kentucky market — it has opened six restaurants, including one in West Chester, with three more on the way — that Dayton was a logical next step for expansion.
“Not a day goes by that a customer doesn’t come into our West Chester store and ask us, ‘When are you coming to Dayton?’” Fryman said. Firehouse is wrapping up the planning of its first Dayton-area location at 8436 Old Troy Pike (Ohio 202) and is finalizing a lease for an Oakwood location at Irving and Oakwood avenues near the University of Dayton campus.
Fryman said he recognizes the robust level of competition in the region, but is undeterred. “I feel like we’re unique, and as long as we deliver, we feel our way beats their way,” he said.
Ted Tolliver of Mason feels much the same way about Jersey Mike’s sub shops. He purchased the franchise location at 6002 Far Hills Ave. in Centerville in 2009, and the store’s sales grew more than 20 percent each of the first two full years, and showed similar growth in 2012, Tolliver said. The second Dayton-area Jersey Mike’s is under construction at a new retail development at 3510 Pentagon Boulevard in Beavercreek, with a projected opening in April, and Tolliver said he is shooting to open three to five more restaurants over the next three to five years.
The local Jersey Mike’s activity is part of a broader expansion for the New Jersey-based sub chain, which expects to open 200 more locations nationwide in 2013, Tolliver said.
One long-established Dayton-based sub chain — The Submarine House, which was founded in 1973 and now operates seven locations in the Miami Valley — is confident that it will survive the onslaught of competition, and in fact is mapping out an expansion into the Columbus and Cincinnati-area markets, according to Brody Danner, who oversees the small chain with his brother Jason. Both are sons of Submarine House founders Gary and Susan Danner.
“At first, we were scared” at the influx of new sub-shop competition, Brody Danner said. “But now we realize we’re doing something right. Our customers go and try the new guys, but they come back. We have stood the test of time.”
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