3 Big Numbers is a weekly column that looks at a few key details from around the c-store industry.
RaceTrac’s bid for sandwich chain Potbelly this week felt like it came out of left field. The $566 million all-cash deal is expected to close in the fourth quarter and, once approved, will put a well-known QSR in the hands of a fast-growing c-store company.
It’s hard to gauge this acquisition right now because we haven’t really seen anything like this. But considering RaceTrac needs to level up its foodservice game if it wants to keep pace with other super regional chains, the deal could turn out to be a big win.
In this week’s “3 Big Numbers,” we examine what RaceTrac will be getting once the Potbelly acquisition closes.
20
The number of sandwiches on Potbelly’s permanent menu.
Acquiring Potbelly gives RaceTrac access to a robust menu of salads, sandwiches, soups and more. The sandwich menu alone includes 20 different varieties, from tried-and-true standards like tuna salad and turkey breast to more specific items like the “Sweet Heat Pork BBQ” and the “Pizza Melt.”
The QSR also frequently updates its menu. The company added the first steak sandwich to its permanent menu earlier this year. The new handheld features prime rib steak topped with Swiss cheese, caramelized onions and garlic aioli.
Would Potbelly be able to offer its full selection in a convenience store format? That’s hard to say, but given that Potbelly has been testing an 1,800-square-foot prototype complete with seating, the brand can already fit into some pretty tight spaces.
$27,040
The average weekly sales of Potbelly stores in Q2.
There are numerous ways Potbelly’s offerings might enhance RaceTrac’s c-stores, but the restaurant chain’s standalone locations will also bring a significant benefit.
Potbelly’s average weekly sales per store in the second quarter reached $27,040 — up 3.6% from the same period last year. That added up to total quarterly revenue of $123.7 million.
Same-store sales also increased by 3.2% in Q2, which is better than many of its peers. Potbelly is clearly doing something right with its stores, and RaceTrac has the opportunity to build — and capitalize — on that strength.
16.7%
Potbelly’s average store-level margin in Q2.
Margins for Potbelly came in at 16.7% in Q2. That’s 100 basis points higher than the same period last year.
That number could get a boost if the acquisition goes through. First, some of the corporate functions like finance, human resources, IT, legal and marketing can be combined to save money.
Moreover, if RaceTrac does put Potbelly locations inside some of its c-stores, overhead for those locations could be lower than for standalone stores, as they would require no additional rent costs. As Potbelly aims for 2,000 locations, having access to all those RaceTrac stores could be a boon for it as well.
