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Subway may have more units, but McD holds more cash

McDonald’s may have anticipated the day Subway would surpass it as the world’s largest foodservice company, which could explain why company officials have long insisted the goal of the Golden Arches was to be “better, not just bigger.”

Earlier this week, McDonald’s was once again chanting that mantra as the media trumpeted the news that Subway had indeed grabbed away the title of largest restaurant chain, based on the number of worldwide units.

But while McDonald’s is no longer the biggest chain on the block in terms of locations, it leads Subway in growth metrics that will become increasingly important as the United States restaurant industry grows even more competitive. In addition, it banks a significantly larger amount of sales than the sub sandwich maker.

According to NRN research, McDonald’s U.S. average unit volumes rose 4 percent in 2010 and 3.1 percent in 2009. In comparison, Subway reported a 1.9-percent increase in 2010 AUV’s for units in the United States, over a 0.5-percent decline in 2009. Estimated 2010 U.S. average unit volumes totaled $2.3 million for McDonald’s and $453,600 for Subway, according to NRN research.

International sales growth also is expected to be crucial to restaurant companies looking to increase revenue and earnings in the coming years. McDonald’s $45 billion in sales in 2010 from more than 18,700 restaurants abroad easily led Subway’s 2010 international sales of $4.6 billion from more than 10,100 locations, NRN’s Top 200 census found.

Still, the chains are no doubt locked in a long competition. Subway debuted its breakfast program last year, aiming to tap into the morning traffic that McDonald’s has handily held since the 1970s. Both brands also are focused on beverages, with Subway looking a new coffees and iced teas drinks, while McDonald’s continues to push its McCafe extension.

Contact Mark Brandau at [email protected].

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