Panera Bread Co focuses on providing a premium dining experience in a fast food environment. The company’s core offer centres around artisanal breads and made-to-order products. It is constantly looking to improve customer satisfaction, with initiatives such as its 2007 introduction of the “expediter”, an employee charged with directing lunchtime in-store takeaway traffic, and through establishing a staffing algorithm in order to address the busy parts of the day more efficiently.
The company is pursuing an aggressive growth strategy. Panera Bread Co’s proposition as a server of freshly prepared and premium ingredients is aligned with current consumer trends, making strong future growth possible.
During its previous rapid expansion, Panera Bread focused on increasing transaction numbers at the expense of profit margins. In the future, the company is planning to maintain strong unit growth, but with a greater focus on increasing profit margins by raising prices and promoting higher margin products. • KEY FACTS
Summary 1 Panera Bread Co: Key Facts Panera Bread Co 6710 Clayton Road, Richmond Heights, MO 63117, US +1 (314) 633 7100 +1 (314) 633 7200 www.
panerabread. com Bakery fast food Euromonitor International from company reports, trade press Full name of company: Address: Tel: Fax: www: Activities: Source: Summary 2 Panera Bread Co: Operational Indicators 2006 2007 US$1,067 million US$57 million 1,230 21,800 2008 US$1,299 million US$67 million 1,325 23,300 Net sales Net profit Number of outlets Number of employees Source: US$829 million US$59 million 1,027 17,400
Trade press, company research, company reports COMPANY BACKGROUND • Panera Bread Co is a public company that specialises in artisanal breads made with natural ingredients. Besides bread and other fresh baked goods, the company offers a variety of made-to-order sandwiches and salads, soups and beverages, including speciality coffee items. New products are rolled out frequently, typically in conjunction with a holiday or season. In 2007, Panera acquired a 51% stake in Paradise Bakery and Cafe, which runs a chain of more than 70 bakery-cafes in the Southwestern states in the US.
Panera Bread operates company-owned and franchised restaurants in the US and Canada. The company seeks out both urban and suburban locations. Just over 40% of the company’s units are company owned, with the rest being franchised. • ? Euromonitor International Page 1 Panera Bread Co – Consumer foodservice US • Despite the economic downturn in the latter part of the review period, Panera Bread has remained strong. Its positioning as an upscale fast casual restaurant offers a good alternative for consumers who are trading down from full-service restaurants.
Its recent strategy includes capturing additional day part spending, putting a greater emphasis on breakfast, opening new units and expanding menu offerings. Panera Bread has a large national presence in the US, with bakery-cafes located in 40 states. In addition to its coverage through its eponymous brand, the Paradise Cafe & Bakery chain is located in several states in the West and Southwest. Panera Bread Co locations bake their own bread, while the company operates 19 fresh dough facilities. These dough facilities provide dough to all bakery-cafes for on-site baking.
While it does not rely on a supplier for its fresh bread, it does use suppliers for fresh produce as well as for its antibiotic-free chicken. In March 2009, Health magazine named Panera bread the healthiest restaurant in the fast food restaurant category in the US. Panera was praised for its healthy side item offerings, including apples and baked chips/crisps, as well as its portion-controlled sizes, the use of antibiotic-free chicken and its healthy children’s menu items, including organic yoghurt and cheese, natural peanut butter and white whole-grain bread. • • • COMPETITIVE POSITIONING Panera Bread Co is positioned somewhere between fast food and casual dining, and, as a result, the company competes for customers within both. Its main strength lies in its high quality products and attractive unit design. Panera Bread Co’s menu items are generally positioned to be comparable with similar items from a full-service restaurant, but priced and timed closer to fast food. Panera Bread Co is the clear leader in fast casual dining, with a 20% share of value sales in 2008. Panera Bread Co is classified as a bakery products fast food chain, a broad category which ncludes both bakery and sandwich operators. The company is different from other leading competitors, which include Subway and Dunkin’ Donuts, as its provides a combination of premium ingredients, high quality service and a pleasant dining environment. In the bakery products fast food subsector, Panera Bread Co had a 6% value share in 2008, making it number four in the subsector. Growth has been strong and steady for Panera Bread Co, as a result of its solid outlet expansion, continual new product innovation and growing consumer appreciation of the fast casual dining concept.
It also benefits greatly from its positioning as a meeting spot for what the company refers to as “Panera Warmth”. Specialist coffee shops, especially Starbucks, have long been considered a destination for somewhere to work or meet, and Panera Bread Co has made improving the customer’s in-store experience a priority by installing free wi-fi services and designing its stores as a place to relax. Panera Bread Co has a favourable first-mover advantage within fast casual dining.
The company conducts the majority of its business in the morning and at lunchtime. Its initial entry into the dinner day part was not successful, although it maintains its very successful lunch and breakfast business. Future growth for the company is likely to be more challenging in the current economic environment, as its customers may trade down to cheaper fast food. Panera Bread is hoping that the additional traffic from its breakfast sandwich menu and snack items will offset the traffic lost to money-saving customers.
The company plans to expand through both company-owned and franchised units. Panera Bread Co does not sell single-unit franchises. It develops by selling market areas, which require the franchise developer to open a number of units, typically 15 bakery-cafes, in a period of six years. The majority of the business is in the US, with a small number of locations in Canada. As of early 2009, the company had not announced plans for further international expansion. Panera Bread Co: Competitive Position 2008 Value share 5. 6% 20. 2% Rank 4 1 • • •
Cite this Panera Bread Company
Panera Bread Company. (2018, Mar 11). Retrieved from https://graduateway.com/panera-bread-company/