Sandwich/bakery tenants remain popular, especially those brands that provide elevated artisan food, as well as a café-like ambience that emphasizes fresh baked bread and unique dessert treat items. Look for these establishments to provide food and drinks beyond the standard sandwich fare in order to appeal to the “off hours” customers who want a treat in-between the usual breakfast, lunch or dinner parameters.
Many brands in this category remain eager to lease spaces in more suburban and even rural areas that do not already have higher-end sandwich and dessert café options. However, as more office workers begin physically re-entering the workplace environments — which appears to be the trend going forward — look for urban street fronts to also be targeted, especially sites along a major transportation hub or near a college. Because a sandwich bakery shop appeals to such a wide customer base, it remains an attractive tenant for any type of retail space, but especially an end cap with outdoor patio seating. Although brands such as Toastique and la Madeleine are both expanding at a rate of up to 20 new units per year, those numbers pale in comparison to some of the other sandwich/bakery brands that are currently gearing up for massive growth, notably Jersey Mike’s, Potbelly, Paris Baguette and Pret A Manger.
Jersey Mike’s will continue its strong U.S. expansion at a rate of 300 to 325 new units per year over the next two years, followed by 400 new units per year by 2026. The specialty sandwich brand has announced that Florida is especially being targeted for growth, particularly Tampa, as well as the lower west portion of the state, including the metros of Fort Myers, Cape Coral and Naples. Jersey Mike’s will also open new units in the Northeast states of Rhode Island, Connecticut, Pennsylvania, Maryland and New Jersey; the Midwest states of Wisconsin, Illinois and Iowa; the Northwest states of Oregon and Washington; and in the Southern state of Kentucky.
Watch for Jersey Mike’s to prefer end caps in the 1,200- to 1,800-s.f. range, either a strip center, neighborhood center or shared outparcel; inline spaces will be considered if there is great visibility. Retail street-front spaces are also considered, and an outdoor seating area is ideal. Space can be within an urban metro, a suburban neighborhood or even a rural community within a retail-heavy section. The site should have at least 12 parking spots and a population of 45,000 in the trade area. Preferred co-tenants include convenience stores such as Walgreens, office supply brands such as Staples, grocers such as Sprouts Farmers Market, or higher-end QSRs such as Five Guys. Jersey Mike’s is known for its bread that is baked fresh on the premises, in addition to its sandwiches served “Mike’s Way” with onions, lettuce, tomatoes, olive oil, red wine vinegar and spices.
Potbelly is also on a massive expansion push, with a goal of opening between 40 and 50 new units per year until the end of 2025, and then bumping that number up to 175 to 185 new units per year from 2026 until the end of 2033. This will be done by significantly boosting up its franchise operations. Immediate growth will be focused on Florida, especially throughout the Tampa and Orlando metros, as well as New York City, St. Louis, Columbus, Ohio, and Washington, mainly in the Seattle and Tacoma metros. Expansion will also occur into the Southern states of Texas, Arkansas, North Carolina and Tennessee, as well as the Northern Atlantic state of Maryland.
The preferred square footage for a Potbelly unit is between 2,000 and 3,000 s.f., although the chain is considering opening smaller units in the future to further capitalize on the popularity of its drive-thru/digital pick-up orders. Potbelly will consider inline spaces of urban street-front sites, as well as end caps of strip centers or a shared parcel within a suburban-based power center or a lifestyle center. Potbelly will also consider smaller 800-s.f. kiosk-type non-traditional sites, such as in airports, universities or hospitals. Co-tenants should include errand-lifestyle brands such as Great Clips or Orangetheory Fitness, as well as non-competing eateries such as Blaze Pizza. Potbelly is renowned for its 18 different hot sandwiches, as well as milkshakes and desserts.
Paris Baguette expects to open between 120 and 140 new units per year in the U.S over the next six to seven years. Its expansion will occur throughout all regions of the country, with immediate growth taking place in the metros of Atlanta, Cleveland, Columbus, Ohio, Houston, Detroit, Nashville, Tenn., Hartford, Conn., Virginia Beach, Va., Portland, Ore., and San Diego. Future markets that will be targeted include the metros of Indianapolis and Boston, as well as in regions throughout Vermont, Wisconsin, South Carolina, Florida, Mississippi, Arkansas and Louisiana.
The types of retail sites Paris Baguette looks for are in the 2,000- to 3,200-s.f. range, with at least 30 feet of frontage. Space should be a second-generation inline or end cap in a high-traffic suburban lifestyle center or a neighborhood center, ideally near offices. Downtown retail street-front spaces are also considered, including ground-floor units of multifamily buildings. Because Paris Baguette originated in South Korea, the brand originally targeted centers with Asian-themed co-tenants, such as H Mart or Daiso. But its future plans include widening its demographic base beyond the Asian audience, and it now seeks such co-tenants as non-competing restaurants such as CAVA or errand brands such as Sally Beauty. Paris Baguette sells sandwiches, salads, coffees and tea, as well as freshly baked French-inspired cakes, pastries and breads.
Pret A Manger, the England-based sandwich/organic coffee chain that first penetrated the U.S. in 2000, is now ramping up its presence in the states by enlisting new franchisees. The chain has a goal of opening between 40 and 50 new units per year over the next six years. Pret A Manger especially has its sights set on expanding into regions where it does not already have a presence, targeting Washington, Texas and Florida. Immediate expansion will occur as a result of its current franchisee in the U.S., Dallas Holdings, which will open up to 40 locations in Southern California, primarily in Los Angeles, Orange County and potentially San Diego. Dallas Holdings also worked out a partnership deal with Pret A Manger to claim exclusive rights for opening units in New York, Pennsylvania and Washington, D.C., in addition to having operational control of the current 52 Pret A Manger shops in those same states. Dallas Holdings indicated interest in introducing new formats for the brand, such as drive-thru units.
Generally, Pret A Manger seeks spaces in the 1,500- to 3,500-s.f. range. Pret A Manger has been opening in urban retail street-front sites, both inline and end caps, as well as food court units inside regional malls, but the brand indicated it would like to expand away from these traditional urban sites and instead focus on street-front units in smaller, secondary and tertiary markets, such as suburban communities and small towns. Pret A Manger will also seek transportation hub-stops, such as along highways and in airports. Preferred co-tenants can include other weekly errand brands such as The UPS Store, and non-competing snack-oriented brands such as Smoothie King. Pret A Manger is known for its healthy sandwiches made with freshly baked bread, as well as its organic coffees, teas, lemonade and pastries.
