New Panera Bread location offers “pay what you can afford” pricing model
A sign at the entrance of a St. Louis area Panera Bread reads “Take what you need, leave your fair share.”
Customers order, but instead of a register, a donation box completes the transaction. Patrons of the newly reopened St. Louis Bread Company location (the name Panera operates under in St. Louis) are handed a receipt for the transaction indicating the retail value of their order. And although they are not required to pay any amount for the food they order, 1/3 of customers are said to be opting to pay more than the retail value of their check. (Those who cannot pay at all are asked to assist around the store if they are able.)
Former Panera CEO Ron Shaich, who stepped down from the gig last week, displays wide-eyed CEO hopefulness about the unusual business model of his newest store:
Shaich considers the non-profit Panera Foundation to be his next big thing. “My hope is that we can eventually do this in every community where there’s a Panera,” says the entrepreneur who bought Panera more than two decades ago when it had just 19 locations and grew it to more than 1,400 locations and upwards of $2.8 billion in annual sales.
He plans to open two more of the non-profit cafes in two more cities in the next six months, but declined to say where. His goal is hundreds of Panera Cares Cafes around the country.
But first, this one has to work.
“It’s a fascinating psychological question,” says Shaich, who says he’s dreamed of doing something like this for years. “There’s no pressure on anyone to leave anything. But if no one left anything, we wouldn’t be open long.”
Schaich feels signs are good at the formerly company owned Panera location- after the conversion to a non-profit business and grand reopening of the restaurant, same store sales were up 20% Sunday. (Despite the fact that the location uses day old bread except in sandwiches.) Proceeds from the cafe, open from 7am-4pm, will go to help at risk youth and hunger initiatives in the area.