As digital sales increase, Potbelly tests more tech investments

Potbelly’s average unit volumes hit a record high, thanks in part to digital sales. / Photography: Shutterstock.

Potbelly said last week that its same-store sales rose 17.2% in the second quarter, with average unit volumes hitting a record high. The company also posted a profit of $600,000 during the period, an improvement of $4.5 million from the same period a year ago.

Digital has played a big role. Thirty-six percent of the Chicago-based chain’s sales now come through digital channels, including the company’s mobile app and third-party delivery.

Potbelly is planning more of that. The company is testing new in-store technology it calls Potbelly Digital Kitchen, which is designed to improve the efficiency of its online ordering while improving store visits.

“We believe this project has great potential to build on the customer-facing digital investments we’ve made over the past 18 months,” CEO Bob Wright told investors Thursday, according to a transcript on the services site. financial Sentieo.

The system is designed in part to help Potbelly better manage the business. Potbelly already has two manufacturing lines, Wright said.

By scanning both lines, online and in-store orders are sent digitally to the lines, which can help the business determine potential issues. “We have the benefit of monitoring all of our stores that have these systems in place so we can troubleshoot and coach where there may be gaps,” Wright said. “We may also use this data to continue to adjust [labor] and improve the system itself.

The company has implemented the system in “more than a handful” of its stores and is “satisfied with the results so far”.

Wright said the digital kitchen can improve speed of service and on-time orders, improve food accuracy and quality. The company is now considering a broader rollout to the entire system, which includes 393 corporate units and 47 franchises.

“We’re at the point where we’re going to look at what the capital costs would be for a wider deployment,” Wright said.

Potbelly’s digital sales have been boosted in part by its loyalty program, which now has 2.2 million members.

The company used targeted offers to increase downloads and used digital marketing and paid social campaigns, which helped drive sales in the quarter. Wright called the company’s digital marketing efforts “very encouraging” and said he expects them to be major growth drivers going forward.

The company also gained some traction during the period through its innovation, something it hasn’t done in some time. He rolled out Cold Brew coffee and brought back a Cubano sandwich and a lemon cheese cookie, which drove an increase in sales and transactions.

“We enjoyed bringing food innovation back,” Wright said. “Sandwiches bring a pretty clear quality upgrade to the brand, and Cubano did that.”

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