Panera’s Model Less Focused on Bread Winning

At one of its new St. Louis-area locations, Panera Bread is asking customers to pay… what they want. No set prices. No tax. Just come in. Take your Bacon Turkey Bravo. And leave payment you think is fair. While this approach is pretty remarkable, keep in mind that this is being operated (a) as a non-profit and (b) in an upscale suburb. However, this article mentions the One World Salt Lake City restaurant has been doing this since 2003.

The national bakery and restaurant chain launched a new nonprofit store here this week that has the same menu as its other 1,400 locations. But the prices are a little different – there aren’t any. Customers are told to donate what they want for a meal, whether it’s the full suggested price, a penny or $100.

The new store in the upscale St. Louis suburb of Clayton is the first of what will Panera hopes will be many around the country. Ronald Shaich, Panera’s CEO until last week, was on hand at the new bakery Monday to explain the system to customers.

The pilot restaurant is run by a nonprofit foundation. If it can sustain itself financially, Panera will expand the model around the country within months. It all depends on whether customers will abide by the motto that hangs above the deli counter: "Take what you need, leave your fair share."

Panera hopes to open a similar location in every community where it operates. Other nonprofits have opened community kitchens, where customers set the price, and the idea has spread among food enthusiasts and philanthropists. But Panera brings new scale to the idea – its community restaurants will use the company’s distribution system and have access to its national food suppliers.

The first location bears the name St. Louis Bread Co. Cares – the chain’s former name and one it still uses in its hometown. Customers seemed alternately puzzled and pleased by the concept.

Dawn Frierdich, 52, came in to buy three loaves of bread an iced tea. She asked how much the drink would cost.

"About $1.85," said the 21-year-old cashier, Michael Miller.

And the whole order?

"It would be, like, $12," Miller told her, reminding her she didn’t have to pay if she didn’t want to. Frierdich tried to hand him $12 in cash, but he directed her to put it in the donation jar.

"This is a little hard. I just can’t wrap my head around this," Frierdich said.

So what do you think? A great new paradigm allowing the most generous among us to cover those who can afford less, or dadgum hippie stuff infecting American capitalism? And could this ever be done in for-profit fashion?

2 thoughts on “Panera’s Model Less Focused on Bread Winning

  1. A cool concept and one that has been done on smaller scales for years. I remember a small town fireworks show as a kid at which a collection was taken for next year’s show. The more people gave, the better their town show would be the following year. I would pay more to eat at this Panera if they were donating the profits to a good charity. There will be those who abuse the system and I don’t think it will work in all communities but most people will probably pay the fair price or more.

  2. I’d agree. I think it would be tough to pull off in a rural setting, but in urban and suburban areas I think this could actually be sustainable, and maybe even profitable. And you’re right, if a company was really interwoven with a cause, the motivation would be there for people to give more. Plus, I have a feeling guys taking dates there would try to impress by laying down a solid chunk of change, but that’s just my gut feeling.

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