Who'd thunk it! Pay-what-you-want Panera closes

January 06, 2018, 09:07 AM

Not only that, but it gives Panera valuable information about pricing.

The price of a product is not set merely on “it costs us this, so we add our mark up and charge that” any more. That is only the supply side.

Most sophisticated businesses want to study what levels of product might be demanded at various prices. Costco does this. It will negotiate a price for a certain relatively small quantity in Costco terms, say widgets that are $10 each in quantity 5,000, but for 100,000 the price is $4.00. Costco will buy 5,000, pay $10 each, then put them in the warehouse for its usual markup, say 10% and sell them for $4.40. That tells them something about demand for the product at the lower price. If the widgets fly off the shelves at $4.40, then Costco knows it has a salable product.

My example is made up, of course. I have no idea of actual numbers, but the idea to explore demand at different pricing is accurate.

If Panera offers a roast beef and arugula on sourdough sandwich for $8.50 in their stores, but few are ordered, but they sell well in these stores at $5-6.00 voluntarily paid, that’s worth knowing, and if nobody wants them at the lower price, that’s gold. They can stop offering those and find something else people want.

Luckily, I have enough willpower to control the driving ambition that rages within me.

When you had the votes, we did things your way. Now, we have the votes and you will be doing things our way. This lesson in political reality from Lyndon B. Johnson

"Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible." - Justice Janice Rogers Brown

January 06, 2018, 09:11 AM

ulsterman

Things that make you go "Duh?"

January 06, 2018, 09:15 AM

Dzozer

quote:
Originally posted by mark60:
I'm hoping my local Toyota dealer adopts a pay what you want policy before I get a new truck.

January 06, 2018, 09:17 AM

chellim1

quote:
Panera has a small group of stores branded Panera Community Cares Cafes. These stores are typically located in low income areas or areas where there is a significant homeless population.

Not this store.

quote:
Panera founder and Executive Chairman Ron Shaich told the St. Louis Post-Dispatch that the St. Louis Bread Co. Cares Community Cafe in Clayton, Missouri, is imminently due to close because it was on a month-to-month lease and the store would have required a big investment.

* * *

'The nature of the economics did not make sense,' Shaich said.

Clayton, Missouri is a very wealthy area.

"Some things are apparent. Where government moves in, community retreats, civil society disintegrates and our ability to control our own destiny atrophies. The result is: families under siege; war in the streets; unapologetic expropriation of property; the precipitous decline of the rule of law; the rapid rise of corruption; the loss of civility and the triumph of deceit. The result is a debased, debauched culture which finds moral depravity entertaining and virtue contemptible."
-- Justice Janice Rogers Brown

"The United States government is the largest criminal enterprise on earth."
-rduckwor

January 06, 2018, 09:20 AM

a1abdj

quote:
This isn’t a socialist experimental restaurant... it’s charity. They do a lot of good, feeding those who cannot afford to feed themselves.

I can't speak for all of the other locations, which have also closed by the way, but there aren't a whole lot of people who can't afford to feed themselves in Clayton, MO.

I thought about posting this last night. I believe it was KevinCW who originally posted when this store opened years ago. I believe it outlasted his prediction by a few years.

January 06, 2018, 09:35 AM

Flyboyrv6

quote:
Originally posted by PeterGV:
Perhaps people misunderstand the business being discussed, leading to these derisive statements.

Panera has a small group of stores branded Panera Community Cares Cafes. These stores are typically located in low income areas or areas where there is a significant homeless population.
Ok... it's a charity... then brand it as such and do not try to convince us that it is a wonderful socialist success.

They don’t turn anyone away regardless of their ability to pay. You are free to pay anything you want, or nothing, for your meal. As the stores are attractive and many are in downtown city locations, they can draw quite a mix of people, both poor and affluent.

Given the above, that a given store would receive an average of 85% of the retail price of the meal is, in fact, pretty great.

I don’t think there’s anything positive about one of these stores closing, or anything about this model that is deserving of the negative comments. This isn’t a socialist experimental restaurant... it’s charity. They do a lot of good, feeding those who cannot afford to feed themselves.

January 06, 2018, 09:40 AM

sigspecops

What a shame, I was waiting for this kind of pricing to show up at the local gun stores. I was hoping to buy a $2k 1911 with the $200 I have.

January 06, 2018, 10:07 AM

Graniteguy

quote:
Originally posted by Sig209:
The part I chuckled at was the 'average payment of 85%' of the retail price...

Like that was somehow a credit to the program.

So think about that. You know there were some lib do-gooders who overpaid to make the program succeed. So there were likely a ton of rascals paying next to nothing - just pretty much taking.

And I am not in food service but I hear the margins are pretty slim. So those particular restaurants were operating in the red getting infusions from corporate to make everyone seem like it was a great viable program.

Nothing evil about capitalism. In fact the opposite is true. They tried a half-baked socialist idea and now 'X' number of workers are out of a job because they failed to do business at market dynamics.

Oh - and I like the 'we lost 15% of our revenue but the program is working' idiot.

--------------------------------------

Margins are only in the single digits - this guy is an idiot and the experiment was doomed from inception.

January 06, 2018, 12:53 PM

KevinCW

That's why their food is so overpriced and the portions are so small.

10 bucks for half a sandwich and half a salad... 10 bucks and I am still hungry.

Good riddance.

January 06, 2018, 01:03 PM

chellim1

quote:
Originally posted by KevinCW:
That's why their food is so overpriced and the portions are so small.
10 bucks for half a sandwich and half a salad... 10 bucks and I am still hungry.
Good riddance.

Is it just me... or has it gotten worse?
I mean, I used to like their soups.
Now, they taste watered down or something.

January 06, 2018, 01:09 PM

KevinCW

Havent been in years... at least then it still tasted pretty good, you just paid too much to still be hungry after lunch....

January 06, 2018, 07:47 PM

ScooterX

Clayton or Vinita Park......Everyone loves free.

January 06, 2018, 10:49 PM

signewt

"They don’t turn anyone away regardless of their ability to pay. You are free to pay anything you want, or nothing, for your meal. As the stores are attractive and many are in downtown city locations, they can draw quite a mix of people, both poor and affluent."

I'm familiar with only one and for sure it does not follow this format. This one is a sort of more-expensive version of a college town bakery with an entire wall full & counter shelves of gooey sugared pastries, followed next in line by some low end coffee choices, followed by a limited version of Subway sandwiches with a few soups of the day.

Minimal service, low end carbs, a couple small & feeble salad choices. Moderately decent chili bowl. Bus your own table.

Maybe it's a step up from the McDs on the other end of the block. Doesn't look like any street people frequent the place.

January 07, 2018, 12:02 AM

Rightwire

It never ceases to amaze me how people can rise to the level of CEO and make such ridiculously bad decisions.

January 07, 2018, 12:25 AM

mbinky

One thing that I loved from them? Their iced green tea. It didn't really taste like tea but it was iced and green and yummy.

Last time I had it was when the store opened in APG around 08 or so.

January 07, 2018, 05:15 AM

zoom6zoom

Can't they make it up in volume?

January 07, 2018, 07:27 AM

cas

Only liberals can see it, admit they see it, yet still not see it.

January 07, 2018, 09:11 AM

PeterGV

quote:
Originally posted by signewt:
"They don’t turn anyone away regardless of their ability to pay. You are free to pay anything you want, or nothing, for your meal. As the stores are attractive and many are in downtown city locations, they can draw quite a mix of people, both poor and affluent."

I'm familiar with only one and for sure it does not follow this format. This one is a sort of more-expensive version of a college town bakery with an entire wall full & counter shelves of gooey sugared pastries, followed next in line by some low end coffee choices, followed by a limited version of Subway sandwiches with a few soups of the day.

Thats because regular Panera stores and Panera Cares Community Cafes are entirely different stores.

People are confusing the two in this thread.

The closing of the Community Cafes, which are owned by a charitable 501(c)(3)foundation (Panera Bread Foundation) has more to do with the fact that Panera was sold in 2017 to the German firm JAB that seems less interested in funding charitable causes in the US, and less to do with whether the stores were a worthwhile charity. The charitable foundation is funded by Panera (over $10M a year), pays zero dollars in salaries, and contributes to other charities such as Feeding America.

January 07, 2018, 10:21 AM

Scuba Steve Sig

They set that store of for the PR and the warm feelings it generated in St. Louis' most affluent town. It is the county seat of St. Louis County. I think they also did it in response to a smaller bread/deli restaurant in the same town doing the same thing.

They had suggested prices up and I assure you 3/4 of the patrons probably paid close to that because of peer pressure from their business colleagues eating with them. There is not much riff-raff in Clayton unless a Ferguson protest was occurring. When you sell a sandwich and chips for $8 across the country, you can afford to do this...for awhile.

The kids love their grilled cheese and its right by their school. Anytime they ask for it I suggest Chik-Fil-A with their playground and the cow wins easily.

In the St. Louis metro all Paneras are called St. Louis Bread Co., but some marketing wiz decided nobody in the other 49 states wants to eat St. Louis bread, so they call them Panera. That has always chapped me, but is probably accurate. Anybody want to buy a case of Flint Water?