Fast-casual sandwich restaurant addresses uneasiness among consumers
Potbelly Corp., the sandwich shop, is testing a $7.99 everyday value combo meal amid consumer uneasiness and introducing a smaller prototype store, executives said Thursday
The Chicago-based fast-casual brand, which released earnings for the second quarter ended June 30, “tested everyday value combo meal deals to help provide our more price-conscious infrequent customers with the opportunity to continue to frequent our shops,” said Robert Wright, Potbelly CEO and president.
“The testing revealed a clear winner,” Wright said. “The $7.99 skinny combo not only responds to our customers' cravings for Potbelly, but also we've given our less frequent price-conscious guests a great reason to keep us in their eating rotation while simultaneously protecting our margins.
“Starting in late July, we expanded the $7.99 everyday value combo, which includes a turkey, ham or chicken skinny sandwich with chips and a drink across nearly all of the system,” Wright said.
Early third-quarter sales patterns suggest consumers are still pressured and are “managing their restaurant spend carefully primarily by trimming visits in favor of grocery,” Wright noted.
During the second quarter, Potbelly introduced a new prototype store that is smaller than typical.
“To be clear, the 1,800 square foot is a targeted square footage,” Wright said. “We know that the brand can deliver everything we're looking to deliver at 1,800 square feet.
“Honestly, we've got some franchise locations later this year that are 1,600 square feet,” he said. “So we can go smaller. In some cases, franchising may go a little bit bigger.”
For the second quarter ended June 30, Potbelly’s net income was $34.7 million, or $1.13 a share, compared to $2.2 million, or seven cents a share, in the prior-year-period. Revenues were $119.7 million compared to $126.6 million in the same quarter a year ago.
Same-store sales in the second quarter increased 0.4%.
Potbelly Corp., founded in 1977, has more than 425 shops in the United States. Of those, more than 80 are franchised.
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