, ,

Can suburban favorite Panera make it in the big city? We’re about to find out! The fast-casual restaurant chain, known for its large, comfortable stores in locations with lots of parking, recently announced two new concepts for the urban crowd.

Panera To Go is a 1,000-square-foot, pickup-only store that will have no seating. The first Panera To Go opened in Chicago this summer. Two more Paneras To Go are coming to New York City, with the first store scheduled to open before the end of the year. The plan is to open more Paneras To Go over the next year, in other cities but also in crowded settings like universities and hospitals.

The second new format, which does not appear to have an official name—RetailWire calls it the Urban Core, but this name does not appear anywhere else, including in Panera marketing materials—is 40 percent smaller than the traditional Panera store, with “updated ordering kiosks, a fully digitized menu and a new tracking screen providing more detailed order status,” according to a press release. The stores will have limited counter seating, focusing more on preserving space for shelves where customers and delivery drivers can pick up orders.

Digital sales now make up about 50 percent of Panera’s sales, and the company touts both of its new store formats as “digital driven.” Panera To Go will only offer digital ordering. The second concept will have ordering kiosks, a fully digitized menu, and a tracking screen so hungry customers can obtain real-time status updates about their meal.

Still, Panera’s chief brand & concept officer Eduardo Luz was quick to reassure consumers that Panera is not planning to replace existing stores with these new concepts: “For us, it’s ‘and’, not ‘or’,” he said. “We’re just expanding our customer base.”

Discussion Questions:

  1. Do you think that Panera’s new restaurant concepts will do well in urban markets?
  2. How could other fast-food or fast-casual restaurants adapt their business models to work in new geographies?
  3. What are the advantages of a digital-driven restaurant concept? Can you think of any potential downsides?

Sources: Tom Ryan, “Will Two Digital-First Concepts Prove More Successful than One for Panera Bread?” RetailWire, November 15, 2022; Elizabeth Segran, “Panera’s Big Bet on Urban Diners? Smaller Restaurants,” Fast Company, November 8, 2022; Joanna Fantozzi, “Panera Bread Is Opening Its First Digital and To-Go Stores in New York,” Nation’s Restaurant News, November 8, 2022; “Panera Targets Expansion in Urban Markets Driven by Portfolio of Digitally-Led New Bakery-Cafe Formats,” businesswire.com, November 8, 2022