A major leadership transition looms at one of the world's largest restaurant chains as its chief executive prepares for retirement.
According to Quartz, Subway CEO John Chidsey will step down from his position at the end of 2024, with Carrie Walsh, the company's current president, stepping in as interim CEO during the search for a permanent replacement.
The announcement came after a transformative period for the sandwich chain, which saw significant expansion with over 10,000 new global restaurant commitments. Walsh's appointment signals the company's focus on franchisee profitability and innovation as it navigates through this transition period.
Under Chidsey's leadership, Subway underwent substantial changes, culminating in a $9 billion sale to Roark Capital in 2023.
His extensive experience, including previous roles at Yum! Brands and PepsiCo, helped shape the company's strategic direction during his five-year tenure. The departing CEO will continue to support the company as a consultant, particularly in international expansion efforts.
Clay Harmon, a Subway board member, expressed his thoughts on Chidsey's contributions:
Under John's leadership, Subway has been transformed. His vision and passion have set a high standard that will continue to guide the brand for years to come. Carrie is uniquely qualified to lead Subway through this transition, bringing a blend of expertise in global operations, brand innovation and digital transformation, which will bring continuity and support Subway's next chapter.
The transition occurs as competitor Jersey Mike's receives an $8 billion majority stake investment from Blackstone, highlighting the dynamic nature of the sandwich chain market. This valuation mirrors Subway's recent sale, despite Jersey Mike's operating with significantly fewer locations worldwide.
The restaurant industry faces multiple headwinds, including rising operational costs and evolving consumer preferences. Major chains like Starbucks and Red Lobster have also undergone recent leadership changes as they adapt to these challenges.
The sector's difficulties have led to concerns about potential restaurant bankruptcies reaching levels similar to those seen during the early pandemic period.
Subway's response to these challenges included launching a $6.99 footlong meal deal promotion in August. However, the promotion's performance fell short of profit expectations, leading to its early termination. The company has modified the deal to be available only through digital orders until December 26, with additional discounts offered through the Subway app.
The competitive landscape continues to evolve, with various chains implementing promotional strategies to maintain market share. These efforts reflect the industry's broader struggle to balance customer value propositions with profitability in an increasingly challenging market environment.
John Chidsey's planned departure from Subway marks the end of a significant chapter in the company's history, following five years of strategic growth and transformation under his leadership. The CEO will retire at the end of 2024, with interim CEO Carrie Walsh taking the helm during the transition period.
The change comes at a crucial time for Subway as it continues to expand globally while facing industry-wide challenges. Walsh's appointment and Chidsey's ongoing advisory role aim to ensure continuity in the company's operations and strategic initiatives, particularly in international markets and digital transformation efforts.
