Subway—the ubiquitous sandwich shop—is one of the top US restaurant chains by number of outlets. Yet its US business has been shrinking noticeably.
In 2024, over 600 Subway outlets were shut down. By December 2025, its total number of US outlets fell below 20,000 for the first time in twenty years.
This contraction reflects a combination of factors: intensifying competition, shifting consumer preferences, over-aggressive expansion in earlier years, and changing locational advantages.
India surge
The picture in India could not be more different.
Subway’s first India outlet opened in a mall in New Delhi in 2001. By 2010, it had opened its hundredth outlet; by 2017, its 600th store. In 2026, it crossed the 1,000-store milestone.
Growth has been slow but steady, exactly opposite of the steady decline in the US market.
Complex market
Subway, like other fast-food joints, is a part of the quick service restaurant (QSR) industry, which is riding on the tailwinds of India’s growth story.
India’s QSR industry is complex and varied, with entities ranging from small independent eating places (neighbourhood Udipi type hotels) to home-grown chains (Haldiram’s, Saravanaa Bhavan) to multinational franchises (Subway, McDonald’s). However, the organized QSR market is dominated by a few firms, which control global food brands and generate about ₹20,000 crore in revenue (2024-25 estimate).
The top five companies are publicly listed, and recent press reports suggest that Subway may also be preparing for an initial public offering. The QSR space has seen a surge in fundraising, mergers and market consolidation; all of which point to strong growth prospects for the industry.
Indeed, a report by Mordor Intelligence estimates that the market size of the QSR industry would grow at a compounded annual growth rate (CAGR) of over 9% during 2026-31, to reach $47.3 billion in 2031. Such optimistic growth projections are driven by three factors: Rising incomes, changing demographic patterns, and the rise of food aggregators and delivery platforms.
Lifestyle change
India's rising incomes allow households to indulge in greater discretionary spending, including eating out in restaurants. As incomes rise, there is a tendency to seek out a variety of cuisines and food choices, and a large part of that experience is derived from out-of-home food (dining in as well as delivery).
Macro-level data supports this theory: between 2013-14 and 2023-24, aggregate private final consumption expenditure (PFCE) on restaurants and hotels grew at a CAGR of 8.1%, almost double the 4.4% growth in food expenditure, and in line with the 11% growth in per capita GDP.
Granular data also shows a shift away from home-cooked food, especially in the more affluent segments. For example, data from the 2022-23 household consumption expenditure survey showed that expenditure on served processed food was 19.8% of the total food expenditure for the top consuming class of urban households, and 11.1% for rural households.
The demographic patterns favour the QSR industry.
India’s urban population has expanded rapidly in absolute numbers: estimates of the number of urban residents range from half a million to a billion plus, depending on how urban is defined.
Urbanization typically results in a breakdown of the traditional joint family structure, which is replaced by nuclear families or even single-person households. Shrinking urban households often have more than one earning member; busy lifestyles and long commutes result in a willingness to pay for services that are time-saving and convenient.
Here’s where QSRs come in: a multi-income family can afford to order in or eat out more often than earlier generations. In fact, UPI transaction data reveals that fast food restaurants and other eating places are among the top merchant categories, and now account for a quarter of the total volume of spending.
Cultural shift
The population structure further encourages an eating-out culture. With a Gen Z population (those aged 14-29 years) of 381 million and a millennial cohort (30-45 years) of 339 million, the country has a huge base of QSR customers.
The range of cuisines and brands available, and the high degree of India-specific customization in place, allows various dietary preferences to be accommodated. For example, McDonald’s opened its first outlet in India in 1996, when the youngest millennials were born. Today, these millennials—entering their thirties—are more likely to seek out healthier options (Subway, Millet Express), while older millennials are likely to bring their families to outlets popular with kids (McDonald’s, KFC, Domino’s) or family-oriented Indian cuisine joints (Haldiram’s).
There is a QSR option for every need, age and taste.
Shifting margins
Finally, the growth of food aggregators and delivery platforms has transformed the QSR industry, in both good and bad ways.
Currently, delivery accounts for 40-70% of QSR sales, depending on the brand and type of food ordered. The good news is that delivery platforms have greatly improved customer access, especially for smaller eating places not backed by global brands.
With some premium names also offering delivery, the market has become competitive to the point where customers are spoilt for choice. At the same time, aggregator commissions have squeezed restaurant operating margins.
As the consumption experience— from purchase to payment—becomes more digital, QSRs will have to rework their business models to stay profitable. India has the customer base and paying potential, but restaurants will need to offer an innovative and valuable user experience to attract customers.
The author is an independent writer in economics and finance.