RaceTrac to acquire Potbelly in $566m deal

The deal would give RaceTrac control of more than 445 Potbelly shops across the US.

RaceTrac, the Atlanta-based convenience retailer, has agreed to buy Potbelly Corporation for $566 million in cash, paying $17.12 per share for the Chicago sandwich chain. The deal, expected to close later this year pending regulatory approval, would give RaceTrac control of more than 445 Potbelly shops across the US.

For RaceTrac, which operates more than 800 stores and supplies 1,200 Gulf-branded locations nationwide, the acquisition represents a push deeper into foodservice as fuel margins come under pressure. Potbelly, founded in Chicago more than four decades ago, has built a loyal following for its toasted sandwiches and shakes and is targeting long-term growth to 2,000 outlets.

RaceTrac’s chief executive, Natalie Morhous, said the move would expand the company’s “family of convenience-driven brands,” while analysts noted the challenge of integrating a fast-casual dining chain into a fuel and convenience business. The tie-up reflects a broader trend in the US, where convenience retailers such as Wawa and Casey’s are competing directly with quick-service restaurants.

The acquisition also underscores the growing convergence between traditional convenience retail and fast-casual dining, as companies look to build stronger food brands to attract repeat visits and insulate themselves from fluctuating fuel sales.