Jersey Mike’s “Sub Above” brand positioning is based upon: authentic, freshly sliced cold subs & grilled hot subs made with quality ingredients & abundant meat portions; signature Mike’s Way sandwich topping option which features a drizzling of “The Juice” (blend of olive oil, red wine vinegar & spices); a great customer experience built upon conversational hospitality & fast service speed; and a charitable culture of “giving to give”. The chain started by the Jersey Shore and its East Coast style cold subs are sliced to order with private labeled meats while its hot subs emphasize fresh grilling of Cheesesteaks (chicken & top round roast beef cooked in-house). The goal is to establish each location as a local neighborhood sandwich shop which “makes a difference” with extensive cause marketing and community involvement campaigns that resonate well in the current environment. 40% of orders are generated digitally and corporate reports +180% digital growth from April 2020 to March 2021. Its app is linked to customers’ MyMike’s accounts while its loyalty program generates 45% of sales and represents a key source of customer data. The chain’s AUV is at an all-time high, almost doubling from 2012 to 2021P (helped by recent remodel sales bump) and its EBITDAR margin outperformance reflects low labor costs which more than offset higher food costs (a function of premium ingredients). Rapid unit growth helps build scale which is key given the chain’s limited marketing spend compared to its national chain competitors. In conclusion, Jersey Mike’s is well positioned to maintain sales outperformance by leveraging its core equities around off-premise, a compelling quality/service positioning, a brand commitment to give back to its customers as well as its communities and effective digital/loyalty marketing efforts.
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What is the Federal Government’s Job?
A couple of weeks ago we conducted a thought experiment in which the government became a nonprofit, and this week we propose another thought experiment in which the government becomes a public corporation. We suggest that this could provide very useful input into the debt ceiling debate.
The Importance of the Balance Sheet in Financial Analysis
While most investors are focused on sales growth & margins, they would be well served to further consider the strength of a company’s balance sheet. We look at BlackRock’s financial condition as an illustrative point.
The Importance of Free Cash Flow in Financial Analysis
Cash represents the lifeblood of all business enterprises which is why it is important to analyze free cash flow which we define as operating cash flow minus capex, dividends, and stock buybacks. We illustrate DoorDash as an example of why cash flow analysis is so important.
Lessons From Tucker Carlson
There are many theories about why Fox booted Tucker Carlson, but it may be a very simple reason which can instruct everyone involved in the consumer retail segment.
It is Imperative that Climate Change Regs Incorporate Economic Reality
This week we spotlight efforts by international agencies to lower the earth’s temperature by imposing onerous regulations on energy producers. We suggest it will be better to: begin a process of implementing continuous improvements designed to support both economic & climate progress; and use international organizations to share tech & best practices as opposed to providing them with regulatory powers best left to individual nation-states.
Part 3 – It’s Nice for the US to Save the Climate, But What About the Rest of the World?
In our last 2 posts, we outlined the probability that the UN’s push to lower the world’s temperature by -2 degrees Celsius could drive significant U.S. energy price hikes & shortages. How is this going to help as Asia ramps up the use of coal? Can humans lower the earth’s temperature anyhow?
Part 2: Who is Left to Make Investments in Fossil Fuels & Clean Energy?
There is not a lot of incentive for profit-seeking companies to invest in demonized fossil fuels or in clean energy projects lacking ROI. This points to substantially higher energy prices and supply shortages that will have a profound economic impact.
Part 1: Ramping Energy Demand Clashes with UN’s Environmental Goals
From 2021 to 2050, ExxonMobil forecasts that 85% of the population growth will be driven by developing countries, which in turn, will drive a +15% increase in energy demand.
What if the Federal Government Was Turned into a 501c3 Non-Profit?
Given all the focus on the debt ceiling, we propose a thought experiment in which all 100 federal agencies must compete for charitable donations. If taxpayers get to choose for themselves what to fund, what might we learn?
Like Sinatra Croons: “So you see it’s all up to you, you can be better than you are.”
The top-paid hourly workers are currently enjoying the fastest wage growth, indicative of the current challenge to recruit & retain a skilled labor force.
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