Dive Brief:

• Potbelly Sandwich Shop has unwrapped a new menu featuring a Pick-Your-Pair option where customers can order any combination of a half sandwich, soup, half salad or mac and cheese, as well as the addition of chips or a drink as a bundled meal for a discounted price. The menu also includes a new Short Shake, which is a smaller version of Potbelly’s signature milkshake, according to a press release.
• The changes are part of a turnaround strategy implemented 12 months ago by CEO Alan Johnson, who was named to that position in late 2017. The strategy included the hiring of Ryan LaRoche to run culinary innovation and Brandon Rhoten to rework marketing and its consumer offering.
• The company called this the most significant menu change for the brand in 10 years since its introduction of sandwich sizes Bigs and Skinnys. It was tested in 58 shops last year and had positive results and customer feedback.

Dive Insight:

Potbelly's news illustrates a macro trend happening across the industry in which the definition of value is changing and that change is being driven by consumers. No longer does value mean lower-priced products featured on a dollar menu, for example, but rather how much bang you can get for your buck. A study from market research firm Phoenix Marketing International, for example, found that customers don't mind paying more for certain menu items — they care more about quality than price. 

Potbelly, like Panera's You Pick Two and McAlister's Choose Two before it, is attempting to woo these value-seeking consumers by offering more variety either through a bundled meal or a half-sandwich pick two option. It also offers consumers the chance to try any number of combinations, exposing them to more items on the menu and, in theory, generating more return visits. 

The evolution of the value menu is perhaps necessary. Limited-service restaurants have been jockeying toward a value price war throughout the past year, but those lower prices have not generated traffic gains. One driver of traffic declines, according to Technomic, is consumers don't see the value of dining out, even if that food is very cheap. Value, the research firm notes, is increasingly driven by quality, service and convenience. 

That doesn't mean there isn't an audience for the $1 menu item. But chains are increasingly tasked with finding the sweet spot on price-driven value and quality-driven value. Taco Bell is an example of a brand doing just that. The chain recently introduced its new Cravings Value Menu, which includes items priced from $1 to $5. The $5 category is defined by Taco Bell's box meals — a bundled meal providing variety and, by perception at least, the proverbial more bang for the buck. Other chains promoting this type of value include Carl's Jr., with its $5 All Star Meals, and Jack in the Box's $4 to $6 bundles. 

What all of these propositions prove is that the definition of value is constantly changing in in the restaurant space, and those value offerings — as Restaurant Business reported — have varying degrees of success. Potbelly may have an advantage in that it is positioned in the fast casual category, which means it can get away with slightly higher price points on its value offerings.