With the rise in takeout-friendly foods that brands have been seeing since the start of the pandemic, Restaurant Brands International (RBI), parent company of Popeyes, Burger King and Tim Hortons, is going all in on sandwiches. The company announced Monday (Nov. 15) that it is acquiring Firehouse Subs, a sandwich chain with a focus on first responders and public safety.
“Firehouse Subs is a special brand with a talented team, impressive culture and community focus that resonates with guests and closely aligns with our core values at RBI,” CEO José Cil said in a statement. “We see tremendous potential to accelerate U.S. and international growth at Firehouse Subs with RBI’s development expertise, global franchisee network and digital capabilities.”
In a news release announcing the $1 billion deal, RBI said among the features that drew it to the brand were its digital ordering and payment capabilities, its “strong delivery sales mix” and its 3.5-million-member loyalty program. With the strength of this digital presence, the sandwich brand’s comparable sales in October were up 20% from 2019.
Across the industry, digital sales now make up a much larger portion of restaurants’ sales than they did before March 2020. Findings from PYMNTS’ How We Eat Playbook, created in collaboration with Carat, from Fiserv, which features a census-balanced survey of more than 5,200 U.S. consumers, finds that consumers now are 31% more likely to buy meals to be eaten at home than they are to dine on-site. Additionally, the study found that 43% of consumers are now ordering online for delivery more often than they were prior to the start of the pandemic, and 48% for pickup.
See also: Up for Grabs: Restaurants and Grocers See Path to Picking up 200 Million New Customers
In fact, according to data from PYMNTS’ 2021 Restaurant Readiness Index, created in collaboration with Paytronix, 55% of chain quick service restaurant (QSR) sales are now generated online. Specifically, 23% of chain QSR sales now come through third-party aggregators, 12% come through through these restaurants’ direct-ordering delivery channels and 20% through mobile order-ahead.
Read more: QSRs’ Lagging Loyalty-Reward Investment Hurts Innovation and Sales
Mobile Order Ahead: Score Card See the Firehouse Subs – Mobile Order Ahead Ranking comparing all Apps
With this latest acquisition, RBI will compete on digital marketplaces with popular QSR sandwich chains Subway and Arby’s, among other well-known brands. Earlier this year, Subway reported its highest sales in eight years, following a major change to its menu and a series of improvements to its digital platform. Meanwhile, according to Restaurant Business, Arby’s sales were up 8.5% in 2020. It appears that consumer demand for quick and convenient sandwich options is growing.
“At Firehouse Subs we are united in our commitment to and passion for hearty and flavorful food, heartfelt service, and public safety,” Firehouse Subs CEO Don Fox said. “Joining the RBI family of brands provides an energizing opportunity to assist more communities, not only across America and Canada, but around the globe.”
Overall, an IBISWorld study predicts that the United States’ sandwich and sub store franchises will see market size growth of around 10% in 2021. With the rise in digital ordering apparently here to stay, it seems likely that this growth will continue in the years ahead.