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Panera CEO: Q1 growth proves digital strategy is working

Sales are up 6.2 percent at Panera Bread's nearly 500 company-owned stores thanks to the rollout of the chain's digital operations, ordering and payment system.

April 27, 2016 by Cherryh Cansler — Editor, FastCasual.com

Sales are up 6.2 percent at Panera Bread's nearly 500 company-owned stores, thanks to the continued roll-out of Panera 2.0, a series of technologies designed to enhance the customer experience, CEO and Chairman Ron Shaich said today during the company's Q1 earnings call. 

This growth is proof that the chain digital strategy is working, said Shaich, who said that sales have increased 28 percent in the two years that 2.0 has been in operation at the chain's test cafes in Charlotte, North Carolina. The chain fills 125,000 to 130,000 orders a day through e-commerce, and 17 percent of orders were digitally placed and paid for in Q1. Panera's largest competitor — Starbuck's —  completed only 4 percent digitally. 

Shaich said that these numbers are especially impressive when considering that 2.0 isn't in all the chain's cafes. While all company-owned cafes have the system, franchisees are still rolling it out. The Panera app is also better rated than apps from Starbucks, Chipotle, Taco Bell, Pizza Hut and Dunkin' Donuts, according to Shaich, who said that these facts make it clear that Panera is the industry's digital leader, exclusive of the big three pizza chains.

"As our initiatives roll out and mature, we can clearly see the potential that they represent for sustained earnings expansion at Panera," he said. "Our growth in same-store sales and transactions was the best we generated in four years and we outperformed the Black Box all-industry composite by the widest margin we have ever recorded,

"These results make us ever more confident in our strategy."

The chain is so confident, in fact, that is raising its full-year 2016 targets for same-store sales growth and earnings per share.

Other Q1 highlights

• Raised FY 2016 comparable net bakery-cafe sales target to 4–5 percent.
• Raised FY 2016 EPS target, excluding one-time items, to $6.50–$6.70, up 5 to 8 percent.
• Opened 17 company-owned cafes and 13 franchised cafes.
• Expects 90–100 system-wide bakery-cafe openings in fiscal 2016 and is maintaining its average weekly net sales performance target for new company-owned bakery-cafes of $45,000–$47,000.

About Cherryh Cansler

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Cherryh Cansler is VP of Events for Networld Media Group and publisher of FastCasual.com. She has been covering the restaurant industry since 2012. Her byline has appeared in Forbes, The Kansas City Star and American Fitness magazine, among many others.

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