Potbelly Corp., the sandwich brand, is continuing its digital kitchen rollout, targeting higher-volume restaurants and all new franchise openings, the company CEO said Friday.
The Chicago-based company, which on Thursday released earnings for the second quarter ended June 25, in the first quarter added a dozen more stores to its Potbelly Digital Kitchen rollout and expects to have the operations-enhancing platform in 100 restaurants by year’s end.
Bob Wright, Potbelly president and CEO, said in an interview Friday that he had ordered his salad and cookie lunch four and half hours in advance and the Potbelly Display Kitchen helped get the order on time and correct.
With 38% of Potbelly’s total sales coming through digital channels in the second quarter, Wright added, the Potbelly Digital Kitchen initiative, which is slated for all new franchise locations and higher-volume older restaurants, helps improve through-put during peak periods.
“We all get our food on time,” Wright said. “The impact is that our orders on-time scores are up, because we're processing them in the right way. Food quality scores are up, because we're making it just in time so it's better quality — it's hotter when it needs to be hot and colder when it needs to be cold. And overall customer satisfaction scores are going up for all those digital orders, so it's working really well for us.”
It has also improved efficiency in the restaurants, Wright say. “We've been able to take about an hour of labor a day out of the shop, so there's some cost efficiency,” he said.
Employees also find it easier to operate, he added, and want to work with the PDK.
“We've stated this quarter that it is now officially part of every standard build,” Wright said, “so all new shops are building with it installed and we continue to roll it out in the existing shops. What we've done is prioritize the shops that have the most capacity potential as the ones that that will help us first, so it's really more about prioritizing than it is to set a deadline.”
Among the new stores expected in the next few years are 15 from Potbelly founder Bryant Keil and his son Hampden, who signed a deal in July to franchise the concept in Maryland. Potbelly will refranchise 12 existing restaurant locations as part of the deal.
“We had a town hall meeting with all of our above-shop employees this morning, which we do every quarter after earnings, and that was one of the topics of conversation,” Wright said. “For anybody on our team that's been around for a while, there's a big celebration. There's a lot of there's really a lot of admiration and adoration for Bryant what he did. All of us are here because of what he did when he bought that first location and built it to over 250.”
For the second quarter ended June 25, Potbelly widened its net income to $2.2 million, or seven cents share, from $574,000, or two cents a share, in the same period a year ago. Revenues increased to $126.6 million from $116 million in the prior-year quarter.
Same-store sales were up 12.9%, which the company said was “driven mainly by traffic growth and expansion in traffic share.”
Potbelly, founded in 1977, has 427 shops in the United States including 67 franchised locations.
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