EXCLUSIVE: Potbelly's Plans to Shake Up the UK Sandwich Market

Following the recent announcement that US sandwich chain Potbelly planned to open in the UK, we sat down with Master Franchise holder Akbar Sheikh from Sheikh Holdings to learn more about their plans for the UK.

QSR: Can you tell us a bit about Sheikh Holdings and what interested you in bringing Potbelly to the UK?

Sheikh Holdings is a UK based Investment Company that invests across multiple asset classes, such as Real Estate, Private Equity, Healthcare & Retail. We have made a number of investments in the food space over the past year and we see great potential for the sector as consumer demand and spend continues to grow.
We saw a fantastic opportunity in Potbelly. We first came across the brand in the Middle East, where they have about a dozen stores, and we knew instantly this would have huge appeal in the UK. What attracted us to Potbelly is that we saw something refreshingly different. It really does bring something completely unique to the sandwich market.

QSR: Can you tell us about the Potbelly brand?

Potbelly is a NASDAQ listed sandwich chain that evolved from a little antique store in downtown Chicago. The founder, Peter Hastings, specialized in selling Potbelly Stoves, and later began serving homemade sandwiches, which created lines out the door. The stove became an icon, and today the brand has around 400 stores in the US. Potbelly is growing at around 50 stores a year domestically and has a rapid expansion plan internationally.
The core offering is sandwiches, salads, soups and shakes, but what sets the brand apart is the high quality ingredients together with the atmosphere and ambience. We encourage people to sit down and engage with the staff and the environment. We have live musicians playing in the store at busy periods such as at lunchtime.

So the service, ambience and atmosphere are a key part of the brand experience. Obviously sandwiches are well known in the UK market, but this offering is something different that’s not been seen before.
 

QSR: Can you tell us a bit more about the product offering?

Potbelly is predominantly a sandwich based offering. The food is made in front of the customer- none of the menu is pre-packaged, so everything is freshly made. The sandwiches are all served hot and toasted, the salads are all custom made, and the cookies are baked on site every day.

We have a set menu but people can customise their own sandwich with the ingredients all being visible, showing real openness and transparency to our customers. Additionally we have worked hard to source many ingredients locally and some of the combinations are quite quirky compared to the typical UK high street. We have classic American combinations, such as peanut butter and jelly, and other menu combinations that are equally filling and healthy for all ages. Add this together with a regular selection of soups and shakes and we have quite a wide range offering.

We also make a big deal about the service and the interaction with customers, which we see a lot less of here in the UK at present. To back this former point up, our first General Manager is a District Manager from the US, and our Assistant Managers are currently being trained in the US, so we’ve invested a lot of money in our people.
 

QSR: Where do you see Potbelly sitting within the UK food service market?

Even though it is a sandwich based offering we see ourselves fitting in the wider fast casual space – so we see all those in this sector being our potential competition. In the US for instance Potbelly is widely compared to the likes of Chipotle and Panera Bread.

QSR: How are you planning on getting the word out about the brand?

Word of mouth is a strong marketing tool in itself and we’ve quickly seen the Potbelly name spreading across London, since we announced our arrival at Westfield Stratford. Social media is a big driver for the brand in the US, and we are also seeing a lot of activity here in the UK online with enquiries about the brand and the opening this summer.

We will also be targeting local businesses and employers in the area, as the catering side of the business is a significant tool for repeat customers in the US. This is particularly evident in Stratford where there is up to 4 million sq ft of additional office space being built in the next few years.

QSR: What is your pricing strategy?

At the moment the pricing is yet to be finalized.

QSR: What changes have you had to make for the UK market?

We’ve been proactive in this regard. Our team members have been over to the US and vice versa. We’ve tweaked the menu to offer a few items that are specific to the UK market. We’d expect this to evolve over time too but the core offering remains true to Potbelly and to our loyal fans. The biggest changes have been sourcing local ingredients as well as adapting the store designs to embrace what is a truly historic brand. The Stratford store will showcase heritage memorabilia from Chicago and it will give customers a unique insight into the history behind Potbelly.

QSR: What type of locations are you expecting to open in?

We’re looking at a strong mix of location types. In the US the brand is present in shopping centres, transport hubs, high streets and local neighbourhoods. We see it as a flexible model, with stores in the US ranging from 500 sq ft to 4000 sq ft. Our target in the UK will be similar to that in key cities across the US, high footfall sites in strategic locations within Central London.

QSR: How many stores are you planning to open over the next 12 to 24 months?

Our plan is to open at least 10 stores over the next five years. Westfield Stratford will be the first Potbelly landing in Europe. This store will be a flagship for the Continent so it remains our focus for the next few months. Nevertheless, we are already looking at the next stores to come across London.

QSR: How big can we expect Potbelly to be in the UK?

I think the brand has huge potential. You only have to look at the nationwide success of brands within the fast casual space to see the demand for higher quality offerings. In the US there are almost 400 sites, so we know the brand has the strength to grow quickly and sustainably. The core focus in the next few years will be prime, strategic locations within Central London.

QSR: In setting up- what have you found to be the most challenging aspect of getting Potbelly off the ground in the UK and what have you found easier than expected?

We’ve been pleasantly surprised how well received Potbelly has been here in the UK over the past few weeks. Although this is a new brand for the UK and Europe, there is evidently a huge following for the brand globally. The strength of the brand speaks for itself and we have become all the more confident for its future in the UK.

In terms of the more challenging aspects, it would be finding the right people. With any sort of restaurant operation it is the people who represent the brand and finding staff who will be able to do that to the level we require can be rigorous.

Potbelly is all about the people, so we’ve spent time recruiting the best in the industry. The Chicago based training programmes we have been offering has given us the ability to attract top talent in the local area. So in a way, the brand and the support from the US has given us a huge advantage for our first store.