Paner

Panera Bread Case Study

Gabriel Spargur

Panera Bread is a national bakery-cafe with over 1,500 locations across the United States and Canada. Panera is a chain of bakery-cafe quick service restaurants in the United States and Canada that sells breads, sandwiches, soups, salads, and other bakery items. It is headquartered in Sunset Hills, Missouri. Originally Panera bread was known as the St. Louis Bread Company, until in 1993, Au Bon Pain Co. purchased the Saint Louis Bread Company. During this time, the St. Louis Bread Company was renovating its 20 bakery-cafés in the St. Louis area and in May 1999, to expand Panera Bread into a national restaurant, Au Bon Pain Co. sold its other chains, including Au Bon Pain, which is now owned by Compass Group North America. Au Bon Pain Co. then renamed itself Panera Bread. The company operates and franchises 1,504 Panera Bread bakery-cafés in 40 states and 17 facilities that deliver fresh dough to the bakery-cafés every day. In its headquarters city of St. Louis, Panera Bread still operates under the name St. Louis Bread Company. The St. Louis Metropolitan area has over 100 locations. In 2005, Panera ranked 37th on Business Week’s list of "Hot Growth Companies", earning $38.6 million with a 42.9% increase in profits.

Due to low startup costs and ease of entry the restaurant industry is very competitive. There are many other restaurants operating in the areas where Panera’s are located. With this increased competition Panera has found their niche market with customers that enjoys higher quality food and are willing to pay an increased price for it. Panera Bread places much more emphasis on their establishment as a neighborhood trend, and doesn’t pay much attention to their potential markets within high-rise cities. Panera is taking the risk that another company will move in on their niche and create substitutes for their customers, not to mention continuous economic difficulties could cause customers to trade down to...