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‘Flat’ is progress as Potbelly continues its turnaround

The fast casual seeks simplicity to position itself for sustainable growth.
Photograph: Shutterstock

With same-store sales relatively flat at Potbelly Corp., chain executives are feeling optimistic.

The second quarter’s 0.2% dip in comps pleased CEO Alan Johnson, who said earlier this week that a bump in traffic and increased checks drove the improvement. (By comparison, Potbelly’s comps dropped 3.6% in Q1.)

Johnson, who was named CEO and president of the sandwich chain in December, noted on an earnings call that execs are “encouraged” by the chain’s progress so far this year but “there is still much work to be done.”

That work is taking place in several areas, per Johnson, with traffic- and sales-building efforts already underway and more being launched in the months ahead. These five initiatives stand out:

Simplifying the menu

Potbelly’s menu had too gotten too complicated, execs said, with 116 items and 66 price points. The chain has already eliminated some items and grouped more products according to price, and a complete menu redesign is in the works for 2019. The new menu will make it easier to read and shop by price point, as well as pinpoint LTOs and innovative products and accommodate bundled meal offers—something the chain doesn’t currently have, he said. “This [move] is not only a traffic driver, it’s a ticket driver,” said Johnson.

Improving menu assortment

Potbelly doesn’t offer a prime rib or steak sandwich—an omission Johnson believes is a missed opportunity. Ryan LaRoche, the company’s new VP of culinary innovation, is currently developing an item to fill this gap.

Leveraging off-premise

Potbelly is “vastly underpenetrated” in delivery, to-go, pickup and catering orders, Johnson said, but it had low double-digit growth in Q2. To get a bigger piece of that business, Debbie White, another new member of the leadership team, was hired as VP of off-premise in June. And all-day delivery is now being tested in some units.

Boosting suggestive selling

Employee training has recently focused on suggestive selling with in-store customers. Staff is now ramping up efforts to encourage guests to “add one more” or “make another visit,” and suggestive selling is up from 6% to 40%, boosting checks in the process, said Johnson. New functionality on Potbelly’s app will incorporate suggestive selling on mobile orders, too, pushing customers to add a beverage or cookie to an order.

Capturing the brand's "quirkiness" 

To play up Potbelly’s differentiation, Johnson also added CMO Brandon Rhoten to the leadership team in June. Rhoten is a skilled storyteller, said Johnson, and has already launched several creative digital marketing campaigns that promote Potbelly as a quirky brand that focuses on “eatertaining.”

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