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Potbelly’s average unit sizes hit a record, thanks in part to digital sales. / Photography: Shutterstock.
Potbelly said last week that same-store sales rose 17.2 percent in the second quarter, with average unit sizes hitting record highs. The company reported a profit of $600,000 during the same period, an improvement of $4.5 million from the same period a year ago.
Digital has played a big role. 36 percent of the Chicago-based chain’s sales now come through digital channels, including the company’s mobile app and third-party offerings.
Potbelly is planning even more of that. The company is testing a new in-store technology it calls Potbelly Digital Kitchen, designed to improve the efficiency of online orders and improve store visits.
“We believe this project has significant potential to build on the customer-facing digital investments we’ve made over the past 18 months,” CEO Bob Wright told investors on Thursday, according to a transcript posted on financial services site Centeo.
The system is designed to help Potbelly manage its business better. Potbell has two lines of operation, Wright said.
By digitizing both lines, online and in-store orders are sent digitally to the lines, which helps the company determine potential problems. “We get the benefit of tracking all of our stores that have those systems so we can look for problems and train where there might be gaps,” Wright said. “We can also use that data to continue our exploration [labor] And enhance the system itself.
The company has the system in “more than a few” stores and is “pleased with the results so far.”
According to Wright, the digital kitchen will improve service speed and on-time orders, improve accuracy and food quality. The company is now planning a wider rollout of the entire system, which now includes 393 corporate units and 47 franchises.
“We’re at a point where we’re looking at what the investment costs might be for a wider rollout,” Wright said.
Potbelly’s digital sales have been boosted in part due to its loyalty program, which currently has 2.2 million members.
The company used targeted discounts to increase downloads and leveraged digital marketing and paid social campaigns, which helped generate sales during the quarter. Wright called the company’s digital marketing efforts “very encouraging” and said he expects them to be a big driver of future growth.
Something the company hasn’t done in a while has gotten some attention during its innovation period. It ditched cold brew coffee and introduced Cubano sandwiches and lemon cheesecake cookies, resulting in huge sales and marketing.
“We’re excited to bring back culinary innovation,” Wright said. “Sandwiches give a brand a very clear quality lift, and Cubano has done that.”
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