RaceTrac acquires Chicago-born Potbelly for $566M
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Pedestrians walk outside of a Potbelly in New York City in 2013. Photo: Ramin Talaie/Corbis via Getty Images
The RaceTrac gas station and convenience store chain has acquired the Chicago-born Potbelly sandwich chain.
The big picture: Food service has become a big part of convenience store shopping, with locations offering fresh breakfast sandwiches, healthy options and even locally inspired snacks, according to consumer behavior analysts NielsenIQ.
- Potbelly and RaceTrac leadership said in a release that this is a marriage of Potbelly's neighborhood feel with the amenities shoppers seek at RaceTrac locations.
The latest: RaceTrac, one of the largest privately held companies in the U.S., announced Wednesday that it had reached an agreement to acquire Potbelly for approximately $566 million.
Flashback: Peter Hastings and his wife started serving sandwiches at their Lincoln Park antiques store in 1977.
- Toasty subs, homemade desserts and live music lured in customers, and it soon became a destination for regulars.
- One of those regulars, Bryant Keil, bought the shop from Hastings in 1996 and grew it to more than 250 locations over the next 12 years.
- The company went public in 2013.
Zoom in: Potbelly has maintained the original shop's kitsch appeal, with framed photos on the walls, wood interior and localized flair, like serving giardinera, or hot peppers as they're called on the menu, as a key condiment.
- In addition to signature sandwiches, Potbelly is known for its soups, chilis, cookies and hand-dipped shakes.
- It also now offers salads and "skinny" versions of its subs, which have less bread and fewer calories.
Zoom out: Potbelly has more than 445 shops nationwide, including more than 105 franchise locations, across dozens of states and Washington, D.C., according to a press release.
- Atlanta-based RaceTrac, Inc. includes more than 800 RaceTrac and RaceWay locations in 14 states and approximately 1,200 Gulf-branded locations across the U.S. and Puerto Rico.
What we're watching: RaceTrac says it will "be looking for areas where it makes sense for brands to co-exist," but it would not comment specifically on whether Potbelly's menu items could be added to the company's convenience stores.
What's next: The acquisition is expected to close in the fourth quarter of this year, subject to customary closing conditions and regulatory approvals.