Panera builds on its vision

panera bread sandwich stack

By the end of 2013, it was obvious something was wrong at Panera.

A fast-casual standard bearer—the brand that initially built its reputation on guest comfort and satisfaction above all else—found from its own surveys that more than a quarter of customers had begun avoiding the chain because of slower service, less comfort and botched orders. Its comps, while still positive, were falling and had been all year. Its transaction counts were falling as well.

As Panera Bread CEO Ron Shaich explained during an all-cards-on-the-table investor call that October, the company had taken its eye off the ball. Managers were focused on efficiency and costs, and the customer was being ignored.

“Walk into our cafes at 12:30 p.m. during the lunch rush, and you’ll see the lines,” Shaich explained. “Any one of us can visit a Panera and see that, and see that many customers walk out of our cafes every day when they can’t or won’t wait in the line,” he said.

“They were reaching capacity constraints on their box,” says Sharon Zackfia, an analyst with William Blair and Company. “I’m sure they wish they had discovered the problem earlier.”

Not for the first time, Shaich found himself in need of reinvention. He already was a pioneer in the fast-casual realm, and he had shown the business world new ways to connect with customers through shared values.

But then regional upstarts were doing “Panera” better than Panera. They had conscientiously sourced menus and designed inviting stores, and were conceived with technology built into the brands, connecting with guests in ways Panera wasn’t.

“There has been a modernization of a.m. eateries that have picked away at Panera’s customer base,” says Darren Tristano, president of Chicago-based research firm Technomic. “There’s also the competition of convenience during the week. QSRs have been picking away at the fast-casual category.”

 

VIEW THE FULL FAST CASUAL PACKAGE

 

Pages

Today's top stories

1
A QSR humming through the lunch rush is sweeter than a Carpenters medley to veterans who rose from sweaty, pressure-filled crew jobs to find wealth and success as chain executives. It’s common to...
2
Today’s consumers equate healthy with “clean” or “free-from” additives, even when it comes to indulgent items. Technomic asked consumers to rate the healthfulness of these terms, shown here with the...
3
Because different people define “healthy” different ways, this ranking of the top brands does as well. Technomic’s Consumer Brand Metrics study asks customers to rate the chains they frequent on a...
4
When Jennifer Peters opened Just Be Kitchen in April 2017, her mission was “to serve mindful mouthfuls from a conscious kitchen with kindness on a plate,” she says. On the menu, that translates to...
5
For many limited-service spots, vegetarian options consist of regular menu items minus the meat: for example, a salad without the chicken, or a saucy pasta dish, hold the sausage. That omission can...
6
Today’s diners are more conscious than ever about the foods they eat—what they’re made of, but more importantly, what they’re not made of. Consumers are interested in, and in some cases, will pay...
7
In today’s rigid labor market, restaurant operators have made headlines launching education benefits , referral bonuses , competitive wages and career development programs to attract workers and coax...
8
Like any kitchen tool, a protective glove is only as good as the skills of the person using it. I know chefs who swear by cut-resistant gloves and others who do not allow them in their kitchens,...
9
Although consumers’ moves toward better-for-you menu items continues to influence operators today, fried foods remain universally popular choices for restaurantgoers. With 84.5% of all operators...
10
After boasting for years that America runs on Dunkin’ , the franchise powerhouse is fundamentally changing to keep up. A menu that reverses years of pushing beyond doughnuts will be in place within...