Panera Bread’s noble experiment in pay-what-you-want retail has been successful at its first two restaurants in St. Louis and Detroit, taking in about 80% of the retail price of the food they serve. They serve as shining reminders of the fundamental goodness of people. In the Midwest, anyway. Until recently, the third free-will restaurant in Portland, Oregon was faltering, not attracting enough paying customers and losing money. not taking in as much as Panera’s similar eateries.

It turns out that the down-and-out in Portland like to eat free food and linger. For hours on end. While the point of the eatery is to help people out, the experiment was never intended as a homeless shelter. The business model depends on attracting customers who will pay retail for their meals, and some who will pay a little extra. There’s a difference between a restaurant with a diverse clientele and a day shelter with paintings of bread on the walls, and the restaurant began to resemble the latter.

“We had to help them understand that this is a cafe of shared responsibility and not a handout,” Panera founder Ron Shaich told the Portland Tribune. “It can’t serve as a shelter and we can’t have community organizations sending everybody down.”

Portland cafe has now hired a “community outreach manager,” who will gently prod diners who have overstayed their welcome to leave.

A wiser Panera still tries to care [Portland Tribune]

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Surprisingly, Panera Bread’s “Pay What You Can” Model Is Working
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