Subway deems McDonald's shameful?

The sub-slinger simply told us something we already know.

By InvestorPlace May 22, 2013 8:53AM
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Fastfood working (© Creatas/PictureQuest)By Kyle Woodley


Stick to sandwiches, Subway.


The "House That Jared Built" recently went on the offensive against McDonald's (MCD) and the rest of the fast-food gang by unleashing the results of a survey gauging customer "shame."


The results were both entirely predictable and mostly useless. Reports Business Insider:


"... 1,001 Americans from just about every demographic were polled, participants were asked which bag they were most embarrassed to carry on the street: Taco Bell, McDonald's, Subway, or Wendy's."


"Subway got 11 percent of the vote, Wendy's got 14 percent, Taco Bell received 33 percent, and McDonald's ran away with 42 percent. A whopping 48 percent of all women polled said that they wouldn't be caught dead with a McDonald's bag, and 46 percent of all respondents between 18 and 34 felt the same way."


So, people were less ashamed the more fit-focused their fast food was? You don't say.

This information is damning in theory, but doesn't tell us much we didn't already know … nor is it particularly useful.


The big wrench in this survey is the difference between Subway and the fast-food trio of Wendy's (WEN), Yum Brands' (YUM) Taco Bell and McDonald's. But I'm not talking health -- I'm talking drive-thrus. Namely, the latter three have 'em (and use 'em), whereas the former only has a handful among its 40,000 or so locations.


It's not that walk-up traffic doesn't exist -- McDonald's, for instance, gets roughly 60% of its business from drive-thrus, so the remaining 40% is foot traffic. But that means 60% of its sales come from people who don't have to worry about the knowing glances they'd endure at their local bridge club should they be caught paper-bagging it down Main Street … because they can hide it under the passenger-side seat.


Then, you have the fact that some sizable part of the remaining 40% in foot traffic would be dine-in service; these people could only be caught by others committing the same social faux pas, and thus at the worst would only face a blackmail stalemate.


You might argue that this shaming effect could be more so felt in big cities, where walking is more frequent (and drive-thrus more scarce), but then I'd point out these restaurants' target audiences: McDonald's and Taco Bell in particular market and cater to younger, lower-income audiences, whereas Subway -- which does plenty of its own dealing via $5 footlongs, etc. -- puts its primary focus on its healthy superiority.


Frankly, the former camp is much less likely to give a damn.


It also should be pointed out that shame is hardly the perfect dissuasion. There's a reason we're all familiar with the term "guilty pleasure" -- we know there's a certain stigma that goes along with enjoying something, but we still do it anyway.


And lest Subway get too holier-than-thou-art, it should check out this recent study calling shenanigans on the sub-maker's claim to health fame.


McDonald's has its share of problems, no doubt. Same-store sales have become particularly problematic at various times during the past six months, the company has been forced to revamp its unwieldy menu and yes, McDonald's does face pressure from an increasingly health-conscious America.


But what the neighbors might say when they catch you cramming down McDoubles ain't one of them.


Kyle Woodley is the Deputy Managing Editor of InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @IPKyleWoodley.


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