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Subway to go halal, garners mixed reactions

After quietly changing its logo, Subway has now boldly confirmed that it is in the process of preparing an application for halal certification from the Islamic Religious Council of Singapore (MUIS). Following the buzz on Subway’s move towards becoming halal-certified, the restaurant chain garnered mixed reactions from netizens on its Facebook page, and some claiming they would boycott the brand.

Speaking to Marketing on the move, Michelle Lee, head of marketing, Southeast Asia/Hong Kong/Macau, said that the move was a strategic direction taken for Singapore in response to consumer needs. She explained that it was also a result of consumer feedback and the reviewing of its menu to better cater to consumer needs. Lee added:

We want the wider community in Singapore to experience our brand.

That being said, Lee explained that the company does not foresee any significant brand impact due to results garnered from the company’s market test on non-pork products. It had observed guest choosing different flavours from its menu as opposed to recipes which feature pork proteins.

If Subway’s application is successful, the brand looks to have in-store communication materials to inform customers of affected sandwiches.

On ground staff will also advise customers which sandwiches are affected by the change to non-pork proteins upon order.

This is not the first time the topic of Subway getting a halal certification was discussed online. In 2008, the sandwich joint addressed requests from Muslim customers to make its menu halal-certified. Citing high operational costs and price increase concerns, the brand explained why it could not obtain the certification at the time; it added that doing so would also disable it from participating in Subway’s global supply chain at the time.

“Subway is fully committed to serving customers with safe and quality products that meet or exceed our global requirements. We have been exploring halal conversion and want to get it right,” Lee added.

Speaking to Marketing on the move, Lawrence Chong, CEO of Consulus, said that the move makes sense in a highly competitive and challenging period for the fast food segment in Singapore. Beyond the usual players, there is now a wide proliferation of options, fancy concepts from the region. This includes health-oriented models that are customised via apps for the busy professional.

“Coupled with labour costs and rental still on the high side, brands simply have to maximise their chances by ensuring they can serve as many segments as possible,” Chong explained.

Meanwhile, Q Akashah, executive director, OgilvyNoor Singapore said that the move to get halal-certified would likely help expand its base of customers. This was based on the excitement within the Muslim community about their application to be Halal-certified.

“Subway’s move to go halal in London a few years ago got some backlash, but it made business sense. Its customers are not just locals, but also many Muslim visitors (like us from Singapore) who patronise its halal joints,” Q Akashah said.

She added that historically in Singapore, established brands within the category which became halal-certified have generally benefited from making the move. These benefits extend beyond revenue increase, but the creation of a solid base of regular customers providing recurring income for a sustainable business.

Will Subway see a dip in customer footfall?

When asked if Subway should expect a drop-off in customers after going halal, Chong said that any drop in customer footfall will likely be offset by a whole new segment which is sizeable in the context of Singapore, and regional visitors. This was likely considered by Subway when it examined the data and locations.

“This early seeding or sharing of the news could also be a way to gauge the response of the current customer base. That being said, things can still change,” Chong added.

For OgilvyNoor’s Akashah, the drop off result is possible among die-hard fans of Subway’s menu. However, drop off as a result of issues pertaining to “religious ignorance and/or biasness” is unlikely. This is especially in a society such as Singapore, which she says is an inclusive one.

Also weighing in on the topic is Luke Lim, CEO of A.S. Louken, who too believes that the food type adjustment would not impact the existing customer base.

This makes the move a win-win situation for both the brand and its consumers as it expands the F&B offering for the Muslim community.

“I believe Subway has the brand equity and strength to extend itself to the Muslim community,” Lim added.

Subway needs to know how to engage the Muslim segment

Subway’s success however, would highly depend on how well it executes the move. According to Akashah, there are also other factors at play. For example, brands need to have a good understanding of their new customer segment to make the right business decisions. This ranges from store location, marketing and communications efforts that would resonate with different groups of customers.

Akashah added that an increasing yet troubling trend that follows with this type of business move is a drop in quality of the food or service. This may be due to a lack of manpower or increasing expectations and pressure to meet.

“As such, it would be silly for brands to hold on to stereotypes about this consumer segment having lower expectations of quality, or their willingness to spend,” Akashah said.

She explained that young Muslim consumers – in Singapore and around the world – are becoming increasingly more affluent and discerning. While they may try out establishments which are halal-certified, there is no guarantee on their return. This is especially in Singapore where there are increasingly more choices introduced by small, local brands who have been quietly filling the gaps left by bigger brands.

Agreeing with her was Chong, who added that beyond a Halal certification, Subway will have to think about how engage the new segment. Going halal is always a major decision which requires the company to rethink menu, processes, staffing, supplies, marketing and more. As such, it needs to have a strong marketing angle, and build it up to create a huge buzz with the new customer segment.

“The scene here has grown more sophisticated in the fast food segment, so the move is necessary to maintain a national retail network, and ensure you are not just a niche player with limited presence,” Chong explained.

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Former YSL mogul criticises fashion brands eyeing the Muslim market
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