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
Sarah Lockyer will join Winsight as its senior vice president of content, reporting to Chief Content Officer Grey Montgomery, effective Feb. 1. She will oversee the content strategy development and...
2
Whether you’re offering all-day coffee service as part of a catering package or you’re serving fresh-brewed coffee to hundreds of guests off-premise, you want each cup to be a memorable one...
3
McDonald’s lost ground in its domestic turnaround effort at the end of 2016, with same-store sales for U.S. restaurants slipping 1.3% for the fourth quarter. The company attributed the decline to...
4
A group newly formed to protect and promote the restaurant industry’s interests in the courts is awaiting a response to its initial effort, a push to make tip pooling legal again. The Restaurant Law...
5
In this column, we have previously addressed whether managers and owners can have a share of an employee tip pool, even if they participate in serving guests. The answer is emphatically no, under the...
6
[ View the story "How Wendy's tackles trolls" on Storify ]
7
Providing exclusive consumer trends and insights to enhance your marketing strategy. Powered by Technomic . “Technomic is a Chicago-based consulting and research firm providing a 360° view of the...
8
The meal-ending cup of coffee might be the last chance you have to impress diners. Make it a memorable one by brewing coffee in large batches in the best way. Brewing (and holding) high-volume coffee...
9
Despite McDonald’s sales and traffic challenges, the burger giant remains the best in class in restaurant franchising, according to a just-released ranking of franchised brands. McDonald’s was the...
10
Where’s the beef? With many consumers looking to lower saturated-fat intake and raise fiber consumption while making environmentally conscious purchasing decisions, plant-based proteins are replacing...