Panera Planning To Add More Pay-What-You-Want Restaurants

A month ago, Panera Bread Co. opened its first non-profit, pay-what-you-can-afford eatery, called the Saint Louis Bread Company Cares Café, in Clayton, MO. And the restaurant chain’s chairman is so happy with the results, the company plans to launch two more in the coming months.

“I guess I would say it’s performing better than we even might have hoped in our cynical moments, and it’s living up to our best sense of humanity,” Panera chairman Ron Shaich said of the experiment.

The restaurant’s cashiers tell customers the suggested price of their orders and then the customers decide how much to pay. According to Shaich, between 60-70% pay the menu price. Around 15% dig into their pockets to pay a little more, while the other 15% or so pay less or even walk out paying nothing.

The restaurant, which features the same menu as Panera but is technically run by a non-profit organization called Panera Cares, took in $100,000 in revenue its first month. Panera supports the non-profit but is not on the hook financially if the pay-what-you-want restaurants fail.

Shaich didn’t say where the non-profit’s new locations would be. But a rep for Panera said they are looking for areas that will continue to attract an upscale diner, but is accessible to lower-income communities.

Panera Co. to open more pay-what-you-wish eateries [AP]

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  1. coren says:

    I gotta admit, the slickdealer in me really finds the two options where I don’t pay full price even when I can afford to a bit appealing. Maybe five bucks for the chicken frontega? Yeahhhh panini. (I so spelled that wrong)

  2. thewriteguy says:

    Depending on the menu item, I might pay a $1 or so less, and then give the difference as a tip to the employees.

    • DangerMouth says:

      Panera doesn’t allow it’s employees to accept tips.

      Which is a relief from the ubiquitous tip jar, but kinda crappy when an employee really does go out of their way for you (as they have for me, in the past).

      • Sexual Elf! says:

        You know, lots of places don’t allow employees to accept tips, but I guarantee nine times out of ten, they’ll slip that bill into their pocket lickety-split. Just going on what I’ve seen at various jobs I’ve worked.
        And yes, I will too. Seems to me, if you’re doing a job so well that someone thinks it merits a tip, then why not accept it? Graciously of course. And on the sly :)

        • incident_man says:

          Where I work, which I cannot mention w/o being subject to their draconian Social Media policies, we cannot accept tips per company policy. However, the better service I give, the more likely that customer comes back to me for service again, which in the long run earns me more money.

          Although I technically cannot accept tips, I benefit from my service in other ways.

        • YOXIM says:

          This. I bagged groceries for three years, and although we weren’t supposed to accept tips, you bet your ass we did. The pay was shit, and the tips weren’t all that great either, but every now and then you’d get someone who was really loaded, really lazy, and really appreciative of your efforts in carrying out their groceries. I’ve been slipped a $20 on more than one occasion. : )

      • Pax says:

        There’s tips, and then there’s talking to a manager to let them know that “that young man/lady over there went the extra mile for me, and I just want you to know I *really* appreciate how helpful they were”.

        That looks good on the employee’s record, when it comes time to review their pay and consider offering a raise. :)

    • DanRydell says:

      That’s so altruistic, giving money to the employee instead of the evil non-profit.

  3. dreamfish says:

    I wonder if this is the sort of situation that gets destroyed by dishonest ‘group behaviour’, where more and more people start taking the products without paying and eventually everyone, especially those who paid full price or more, eventually follow suit – for all sorts of reasons such as perceiving it as now being the norm or not wanting to be thought of as the ‘suckers’.

  4. 89macrunner says:

    panera really sucks big balls…i would pay nothing other than a few bucks in the tip jar

  5. fuceefacee says:

    I eat breakfast at Panera every few weeks. It’s good but I think overpriced. I’d pay a dollar less or so on each item.

  6. Tom Foolery says:

    This strikes me as a publicity stunt more than anything else: But a rep for Panera said they are looking for areas that will continue to attract an upscale diner, but is accessible to lower-income communities. I wonder what percentage of those who pay less than full price actually come from those lower-income communites.

  7. 420greg says:

    How do they prevent it form turning in to a soap kitchen?
    You would think once the homeless got word of endless free meals
    that would be the end of it.

    I guess they are not going to open one in downtown Detroit.

  8. suburbancowboy says:

    From my past experiences, you can bet that a good percentage of people paying less than menu price are the people who actually have a lot of money. Those are the same people who don’t tip.

    Middle Class, lower income patrons will pay the proper amount, and tip, because they know how much a tip means to people, because they have often worked for tips themselves.
    NOt to say there won’t be any poor freeloaders coming in.

    • shoan says:

      I agree, when I was delivering pizzas while in school the best tips came from poorer people. I can’t count how many times the well to do neighborhoods would tip absolutely nothing. I think people with less money are more empathetic to a low wage worker than someone with money. But now that i do real well for myself and really well for the area that I live in I tip very well to any pizza driver that comes through.

    • NYGuy1976 says:

      There are many rich people who tip well too. Not everyone wealthy comes from a family with money. Some have worked in the service industry during school and what not and know what its like to work for tips.

  9. mac_daddy says:

    The menu isn’t all that great, the store in Sugar Land has alot of flies all over their open pastry counter. So, lower in price really doesn’t cut it. Yeah, I’ve tried to talk to the manager, but he just said that’s what happens in TX.

  10. mvillafana says:

    only 2 more stores?

    Are they serious?

    • pecan 3.14159265 says:

      You know these things take time to implement. It’s not like you just open up a store and start serving soup and sandwiches.

  11. georgi55 says:

    Panera is ovepriced fad, so if it was 10% cheaper I’d vistit more

    • Randell says:

      Yes, and McDonald’s is a 50 year old fad. Get a clue. This “fad” began almost 30 years ago, and is still growing today. I guess because YOU don’t go there it makes it a fad? Remind me not to take business advice from you

  12. brinks says:

    I LOVE Panera. As a vegetarian working in a mall, I have very few choices. They ARE overpriced, but their food is good and the service is always fast and the employees are great. If I could justify the high prices as a donation to a nonprofit, I’d feel better about my $8 lunch.

  13. NYGuy1976 says:

    Oh Panera please do this in a large city and not a white upper middle class suburban area. I just want to see how long it lasts when your stores are over run with homeless people.

  14. DangerMouth says:

    “Panera supports the non-profit but is not on the hook financially if the pay-what-you-want restaurants fail.”

    Well then, it’a a win/win for them no matter what, right? They get to look good for encouraging others to support their charity, but but can point the finger elsewhere if it fails?

    Or am I being too cynical?

  15. anime_runs_my_life says:

    Hopefully in more neighborhoods around here that need it, not in a well to do affluent neighborhood that is difficult to get to anyway. It’s near to impossible to get to this location in general unless you’re going to be at the Circuit Court all day (like say called for jury duty) and have to find lunch somewhere.

    Maybe some of the less wealthy neighborhoods, like in North County (Florissant, Ferguson), Northwest County (St. Ann, Bridgeton), or even East St. Louis.

    But it’s not going to happen, because less deserving neighborhoods don’t deserve something nice like this.

    In the end, it’s all about the money.

  16. Master Medic: Now with more Haldol says:

    The first month of a restaurant is of little value in determining the success or failure of the concept. It’s new, even though the St. Louis Breads are well known, and people will go further or out of their way to try new. Knowing that, revenues will decline naturally and then marketing must kick in to help improve customer counts.

    Additionally, once people start learning that you can “get away with paying less” revenues will drop further. Knowing that a restaurants average profit margins are 5-20% it dosen’t take much to put the unit in the red, even as a non-profit. And at that point does the parent company prop up the unit by putting money in or close it as a failed experiment?

    I’m not saying this idea will fail, just that the it’s expensive to operate a restaurant and product pricing is a very important component to maintaining profitability which this unit has surrendered to the people.

    • graylits says:

      No kidding, to the people donating, it’s a gimmick. They don’t get a better meal or better service for paying more. They could just donate to a soup kitchen and eat where they want without going out of their way. To the freeriders however it’s a deal to go out of your way for.

      It doesn’t have a hope of succeeding. They’d be better off with putting donation bins in all their stores.

  17. smo0 says:

    A flat rate of 5 dollars for a standard lunch meal at any of these places.

  18. Outrun1986 says:

    Panera is pretty overpriced, so I would probably pay a dollar or 2 less per menu item (but this depends on what I am ordering). If I order a $6 meal, then I would pay $4. Fast food IMO is way too expensive these days, plus over here they tack on a 7-8% tax since it is considered prepared food or take out.

    Does anyone else think they are jacking up the menu prices at this location to make up for all the freeloaders? I mean I haven’t been t to this location so I really don’t know. I really don’t see how this wouldn’t become freeloaders paradise, look at what has happened when a restaurant releases a coupon for a free menu item.. I know if they had this here, it would definitely become freeloaders paradise.

  19. mykie says:
  20. omgitsgene says:

    Clayton, MO is the county seat and home of lawyers mostly. This is a very rich part of town. If they really cared they’d put this in North St. Louis City or East St. Louis where there would actually be a danger of people paying less than menu for the sandwiches.

  21. Pax says:

    This is an awesome, awesome thing, in more than one way.

    Panera is being incredibly awesome by opening these places up.

    Their customers are being awesome by, for the most part, paying at least menu price, or a bit more.

    I applaud them ALL, for being the awesome people they most certainly are.

    And yes, I do actually eat at Panera (their Baked Potato soup, in a Sourdough Breadbowl,is my favorite – and their mac-n-cheese is *delicious* …). If they open one of these “pay what you want to” places, I would at LEAST round the bill up to the nearest dollar, and if I could spare it, pay an extra $1.

  22. bonzombiekitty says:

    If we’re talking simply as a question of how much the food is worth to me, I would probably pay less than the normal menu price. I don’t think the price for what you get there is a little higher than what I am willing to pay most of the time, so that’s why I rarely go there. Paying a dollar or two less than the listed price would attract me to the store more often.

    That said, if I was present at the store and knew the money would be going to charity or something like that, I’d pay menu price or slightly more.

  23. Mecharine says:

    I think the reason why they profited is because of the novelty of free Panera.

  24. nbs2 says:

    I went to Panera the other day for the first time in a couple of years, and my oh my how prices have skyrocketed. I didn’t mind the slightly higher price on the pick 2 menu, but all of the segmenting easily turns what used to be $5-7 meal into something close to $10-12. Not very enticing.

    I would think allowing people to pay what they want would not only benefit the non-profit, but could also help the company better gauge market rates for their product. Now, if only the payments were skewing a little lower.

  25. Cicadymn says:

    I don’t usually eat at Panera anyways, but this would make me reconsider.

    I’m thinking a sandwich, some chips, and a pop for 5 bucks sounds nice.

  26. HannahK says:

    You need an option for “I wouldn’t eat at Panera even if the food was free!”

    This gimmick would completely turn me off, if I liked Panera to begin with. I wouldn’t want to the the customer paying full price, knowing full well that there are other people in the restaurant who are probably taking advantage of it. And I wouldn’t want to pay less than full price and feel like a freeloader either. The whole concept just isn’t for me.

  27. Spectrum says:

    I think the key to the success of this program is not the exact amount a consumer pays for food. (as long as they are paying something) The idea is to choose the particular Panera chain involved in this vs. the other guy.
    Instead of going to my normal Panera Bread eatery, I would go a little out of my way to go to one of the stores participating in the program and pay normal price. That way, I am not taking anything out of my own pocket but I can feel a little better about my meal.

  28. Clyde Barrow says:

    Who cares. That woman in the picture is gorgeous.