Jimmy John’s

Apr 14, 2020 | Report Announcements

Jimmy John’s ongoing brand refresh is moving it away from a singular focus on the pursuit of simplicity (around its core speed, freshness & food quality attributes) towards: menu innovation; new tech to enhance the guest experience; and a marketing revamp which seeks to better leverage its “Freaky Fresh! Freaky Fast!” message. The brand’s “Freaky Fast” core equity reflects that JJ is the only national sub chain offering in-house delivery to go with 30 second sandwich make times with a strict 5-minute delivery radius limit and the goal is to highlight this advantage among unhappy consumers of 3rd party delivery aggregators. JJ’s freshness and quality core equity is distinguished by: freshness as a function of speed; all-natural meats with no added hormones, artificial ingredients or preservatives; bread freshly baked every 4 hours; daily in-house slicing of all veggies (sourced locally), cheeses & meats; lettuce cut into exactly 3/32 of an inch for optimum freshness; and tuna salad made from scratch with Hellmann’s mayo. The chain offers good value with price points starting at $3, with a $5.69 mid-tier Original option and a $6.89 premium Favorites option and its new Freaky Fast Rewards program is appropriate for a loyal customer base with a high frequency rate who originate a lot of digital orders online. Having said all this, it is notable that annual comps have been negative for 6 of the last 7 years, reflecting: JJ’s relatively high average check in a world of heightened QSR discounting that has been aggravated by past menu price increases; higher competition from sandwich chains around food quality & service including competition from c-store chains; increased competition from quality, pre-made grab & go sandwiches at the grocery stores; nearly infinite restaurant delivery options for consumers with the onset of 3rd party aggregators; cannibalization from new development; the lack of a CMO until 2018; the lack of cost effective national advertising; and consumers’ growing appetite for breakfast throughout the day – a menu category not offered by Jimmy John’s. In any case, while JJ’s store-level EBITDAR margin is at a system low, it outperforms the segment average which suggests that JJ’s in-house delivery program is net accretive to the system’s profitability. In conclusion, Jimmy John’s has a very defensible positioning around its speedy, in-house delivery and it looks like the chain stands to benefit from relevant tweaks which are being implemented as part of its ongoing turn-around.

No Bull Economics
Restaurant Research

Email Sign-up

Current Newsletter

Digital Marketing Opportunities

Recent Posts

Restaurant Research

A Restaurant Research LLC Company