Executive Summary:
Jersey Mike’s started by the Jersey Shore and its East Coast style “Sub Above” authentic brand positioning is based upon: freshly sliced cold subs made with private labeled meats & cheeses that are piled high on in-store baked bread; freshly grilled hot sub cheesesteaks (chicken, roast beef & meatless mushrooms); signature Mike’s Way sandwich topping option which features a drizzled zing 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”. An admirable corporate goal is to establish each location as a local neighborhood sandwich shop which “makes a difference” with extensive cause marketing and community involvement campaigns. The system continues to work towards a national footprint and a substantial increase in marketing spend provides access to national TV, extending brand awareness to new development markets. The brand’s new “It’s A Jersey Mike’s Thing” TV ad series, featuring Danny DeVito, effectively uses humor to highlight its core equities around the practice of freshly slicing its cold subs and freshly grilling its hot subs. A 55% digital mix is up from 15% pre-covid and its app is linked to customers’ MyMike’s loyalty program which represents a key source of customer data. Post-covid double-digit comp growth reflects: strength in off-premise & digital/loyalty; increased marketing spend; and a remodel sales bump. The chain’s AUV is at an all-time high, almost doubling from 2012 to 2021, and significant labor margin outperformance reflects sales leverage and a very efficient operating model. Notably, sales headwind includes a lack of price value during a challenging economic environment and especially at a time when Subway is beginning to post a very strong recovery. In conclusion, Jersey Mike’s is well positioned to continue its outperformance given a reasonably healthy economy 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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