Subway Debuts Smart Fridge for On-the-Go Consumers

The AI-powered kiosk is part of the chain’s renewed focus on convenience and growing its nontraditional business.

November 16, 2022

MILFORD, Conn.—Subway launched its first fully unattended smart fridge at the University of California San Diego in September, and after positive results, the company is planning to add more smart fridges across North America in places like airports, college campuses and hospitals, reports CNN.

The interactive smart fridge features artificial intelligence and natural language processing, so customers can talk directly to the smart fridge and ask about the products inside and order. The shelves inside the fridge are outfitted with weight sensors so customers are charged correctly for their order, and the transaction is contactless and cashless. The fridge uses UV-C light sanitation to disinfect after every purchase.

“Initial feedback on the smart fridge is extremely positive, with college students enjoying the convenience and ease of being able to get a sandwich at any time of day. Subway is already seeing strong interest across its system of franchisees interested in expanding their portfolios with smart fridges,” wrote Subway in a statement.

The fridge holds sandwiches, snacks and drinks. CNN reports that local franchises will prep and deliver the food to the refrigerators.

"Subway Grab & Go has quickly gained traction as consumers are drawn to sandwiches made fresh daily from a brand they know and love, versus competitor items that rely on a 14-day plus shelf life," said Karla Martinez, director of innovation for non-traditional development.

Subway says that overall, it has renewed its focus on strategically growing its nontraditional business. Along with expanding its brick-and-mortar presence in nontraditional locations, such as airports, truck stop plazas, college campuses, convenience and gas stores and hospitals, Subway is rolling out flexible, innovative platforms that give franchisees an opportunity to expand their portfolios and better serve their "on-the-go" guests.

The QSR says that during the first three quarters of 2022, about 5,900 nontraditional locations across the U.S. and Canada, representing about 25% of Subway's North American footprint, saw an average 13% increase in same-store sales, compared with the same period in 2021. Locations that were hit hardest by COVID-19 restrictions, such as airports, college campuses and hospitals, experienced an average 22% increase, indicating a strong recovery in 2022 across channels impacted by the pandemic.

"As more of our guests search for dining experiences to meet their 'in-the-moment' needs, the brand's nontraditional locations and platforms can serve them wherever and whenever they are craving Subway," said Taylor Bennett, vice president of nontraditional development at Subway. "As Subway focuses on strategic and profitable growth, there is a significant opportunity to expand our footprint in nontraditional locations and for franchisees to generate incremental revenue for their business."

QSRs are attempting to up their level of convenience, as Forbes recently reported that convenience stores could be taking market share from quick-serve restaurants. Panera Bread recently opened an updated urban store format in New York and plans to open its first Panera To Go in New York, which offers only Rapid Pick-Up and delivery shelves. Sweetgreen opened its first advanced order vehicle pickup window called “sweetlane,” which allows customers to pick up online orders through a drive-up window.

According to NACS State of the Industry data, foodservice accounted for 22.5% of in-store sales in 2021—significantly higher than the 16.8% reported a decade ago. Foodservice now makes up 35.5% of in-store gross profits, compared to 29.2% in 2011.

The convenience factor is an influencing reason on the industry’s increased market share in food sales. “As c-stores upgrade their foodservice offerings to be on par with QSRs, consumers may be more likely to choose the option that is most convenient for them,” writes Forbes. “Speed is one factor, but so is location (consider that 7-Eleven footprint) and additional offerings, like gas or beer. For the latter, the scale will always tip in c-stores’ favor.”