An article that I recently read about Panera Bread’s expansion plans gave me hope in this troubling economy (see: “Panera Looks to New Venues in Expansion,” Reuters, 3/19/09). A national bakery chain with a well-developed brand name, top quality ingredients, convenient and competitive food offerings, and plenty of room for growth, Panera Bread Store Hours has evolved a formula that should help guarantee solid returns for years to come. Panera currently has 1,250 locations with plans to open yet another 80-90 locations this season, a rise of about 7% of its current locations. In California, Panera has just 80 locations, so there are considerable opportunities within that state alone. Since becoming wholly independent from Au Bon Pain Co. in 1999, Panera’s stock has grown thirteen fold, and in 2006, was accepted as the top performer within the restaurant category for one-, five- and ten-year returns to shareholders, so it’s success is nothing sudden – it has been growing slowly and steadily.
Personally, I love Panera. The bread is freshly baked, the menu offerings are well-considered, the atmosphere is inviting and warm, as well as the cost is reasonable…and, I personally can’t imagine a fast casual cafe chain which comes even close to winning vs. Panera on some of those dimensions. Au Bon Pain was made on the same premise that brought Panera success – hospitality, quality, fresh baked goods – but it is, for me, a pale comparison. Take for instance, hospitality – in What Time Does Panera Bread Start Serving Breakfast, you are given a beeper while waiting around for your food, so there is absolutely no confusion whenever your food is prepared and in some cases, someone behind the counter will get out of their method to bring your food for your table. The food is served on actual plates with real silverware and the seating includes comfortable booths and cozy armchairs. In Au Bon Pain, the silverware is plastic, the chairs are stiff and you must bring the food for your table yourself and also the order process involves a less personal approach of completing a form and handing the shape towards the order taker. In terms of quality and freshness, Panera also wins hands-down. The bread is served right out from the oven and they sell their baguettes to consider home, something that Au Bon Pain either will not do or fails to effectively communicate it does.
All of us know the way a hot sandwich can bring out the ingredients’ flavors – Panera knows this and gives paninis – a style of grilling sandwiches that has been extremely popular. At Au Bon Pain, rather than paninis, it offers ‘hot sandwiches’, that are sandwiches which can be continuously kept warm within heat lamp. If you’ve ever endured food which is kept warm like that, you’ll know that it just doesn’t taste excellent or very fresh. For any place that promotes the product quality and freshness of the breads, Au Bon Pain simply qxuhyp not do as good a job executing. Finally, in terms of I can tell, Panera also wins on value. At Panera Bread Corporate Office, your order of any sandwich automatically comes with a bag of chips along with a pickle thrown in and they smartly give you a half-sandwich and soup or salad combination, appealing to health-conscious customers. At Au Bon Pain, nearly every ingredient is line-itemed and you also certainly don’t obtain the pickle…leading to your tab that is more often than not$1-$2 more. So, what went wrong with Au Bon Pain? In 1999, it went public and then got shuffled around to several private equity groups. It certainly hasn’t changed much over time and hasn’t made an effort to improve its offerings relative to Panera’s.
Perhaps, owing to its success over time and too little a severe competitor, it hasn’t had to. But, let’s get real – in a health-conscious, quality, value driven economy like one that we live in – where could you rather go for lunch?