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This Struggling Sandwich Chain Offers a Breakfast Menu

About a fifth of its locations serve egg sandwiches and oatmeal.

For many people, breakfast is the most important meal of the day. For Potbelly, the struggling Chicago-based sandwich chain, breakfast could be the most important meal of the year. Amid declining sales and revenue, some of Potbelly's locations could see a boost from the morning daypart.

According to a recent statement from the chain, about a fifth of all Potbelly locations offer a limited breakfast service between 7 and 11 a.m. Early birds have their choice of three kinds of breakfast subs— Bacon, Egg & Cheddar; Sausage, Egg & Cheddar; and Ham, Mushroom, Egg & Swiss—or oatmeal. The chain also serves a custom blend of coffee, prepared by Chicago-based coffee company Intelligentsia.

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Potbelly first began testing a breakfast menu in the early 2000s, starting with several locations in Chicago. Since then, the offering has expanded to as many as 20% of Potbelly's 443 locations and has developed something of a fanbase on Twitter.

Nonetheless, the chain remains wary of overinvesting in breakfast sales. The morning menu has enjoyed moderate success but Potbelly's management seems to have a different vision for the brand. In a November 2021 earnings call, company CEO Bob Wright took time to emphasize the chain's commitment to the lunch and dinner dayparts, questioning the profitability of breakfast menus.

"It's difficult to see breakfast being in our future anytime in the near future," said Wright. "It can be a big distraction. It can be terribly unprofitable if you don't have the right volumes."

But if Potbelly's profits continue as they have in the past five years, the company will have to take whatever sales it can get—whether from breakfast, lunch, or dinner. According to NASDAQ, Potbelly's current prospects look shaky, at best. The chain's revenue has shrunk by nearly 6% annually for the past five years. In its most recent quarter, Potbelly reported a loss of $2.9 million—an improvement from losses of 13.4 million in 2020, but a loss all the same.

With more locations now promoting breakfast, the chain may have options as it seeks to return to profitability. Breakfast menus have proved extremely profitable for several quick-service giants. Wendy's scored a big hit in 2020 with the launch of its breakfast lineup, ranking in the top three for breakfast sales within less than a year of business.

It remains to be seen whether Potbelly's management will take heed of the trend and start leaning into the breakfast daypart.

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Owen Duff
Owen Duff is a freelance journalist based in Vermont, home of Ben & Jerry’s. Read more about Owen