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Potbelly hopes smaller is better

The sandwich chain has introduced a reconfigured menu with bundled meals and smaller versions of products to get customers to try new things.
Photograph courtesy of Potbelly Corp.

Potbelly hopes that smaller sizes mean bigger sales.

The Chicago-based sandwich chain recently introduced a reconfigured menu, one that features smaller shakes and bundled meals with smaller sandwiches—all in an effort to improve the customer experience and make it less of a risk to try some of their items.

“There was no problem with the products,” Chief Marketing Officer Brandon Rhoten said in an interview with Restaurant Business. “The issue is with the size. And the way they constructed a meal.”

The company’s new menu structure doesn’t make any fundamental change to existing items. The same sandwiches, such as the “Wreck” sandwich and its Oreo shake, are still there.

But it enables customers to bundle their sandwich with a shake, or with chips and a drink, for a discounted price.

The company also has a “Pick-Your-Pair” meal that features a half sandwich with a cup of soup, a half salad or a cup of mac and cheese.

And the menu features a new “short shake,” 10 ounces, rather than the normal, 16-ounce shake.

“A 16-ounce shake is fine if you’re a big guy,” Rhoten said. “But if you buy a shake with a meal and you get a 16-ounce shake, that’s a lot of shake.”

For Potbelly, the new menu is a major test of the company’s new management team and its ability to lift sales.

Same-store sales at the nearly 500-unit chain have been weak, including a 1.3% decline in the first nine months of 2018, coming on top of a 4.3% decline the same period a year earlier.

Alan Johnson was brought in as CEO in late 2017 and Rhoten came to the chain last year.

For much of that time the company analyzed its menu to determine where its holes were, and to find opportunities to keep customers. “We did a lot of work in 18 and now we’re putting that work in 19,” Rhoten said. “We were running around like lunatics.”

The research, he said, found that the company’s menu was difficult for new users. “If you go to Potbelly and you’re an experienced user, it’s not bad,” Rhoten said. “If you are unfamiliar, it’s a lot like a Soup Nazi experience.” He was referring to the “Soup Nazi” episode of the 1990s television show Seinfeld.

New customers “stand there and stare,” Rhoten said. “They get a blank stare. You can tell they’re getting stressed out. They don’t know what to order or how to order.”

Rhoten said that it was missing some basic items that customers have grown accustomed to getting from a sandwich shop. “The benefit will be with new customers,” he said. “They’re used to going to other shops where they have options like this. This makes the menu easier for them to use.”

For Potbelly, the shift to more bundled meals and smaller items is a big change. It’s a 40-year-old shop with a lot of loyal customers, especially in places like Chicago, Dallas and Washington D.C.

But having options that feature smaller sandwiches and smaller shakes will give customers more incentive to try those items without worrying if they don’t like it. “Customers want to be able to try something without a huge risk,” Rhoten said. “They can get a salad and a sandwich or a soup and a sandwich and if they’re not too into whatever they try they kind of have an out.”

Early tests have proven the company’s initial research correct, he said. And Rhoten said that the benefit wasn’t simply that customers tried new items—which they did.

“Tests also showed their perception of the brand increased,” he said.

The company took the best ideas from its tests and put them in place nationally. The chain now plans to advertise the new menu and the experience. “2019 is going to be a fun year for us,” Rhoten said.

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