How Does Panera Bread Stay In Business?

OK, let me start this off by saying that I have a fond appreciation for Panera Bread bagels, especially their Cinammon Crunch variety, which is worth every penny of the $1.49 price that they charge as a once-in-a-while treat.

However, my appreciation for Panera products or their value starts and stops right there.

Beyond that, I just don’t understand how the company stays in business.

The ‘Promotion’

My wife has a Panera Bread rewards card, so she jumped when she got an offer that if she made five purchases on her card during the month of March, she would get a free ‘meal’ consisting of a You-Pick-Two, which is basically a half sandwich and a cup of soup normally provided to you with no price discount whatsoever, so far as I can tell.

But still, we like the bagels and figured that getting a single bagel here and there, either for one of us or for the kids to split, would not end up being such a bad deal.

And, it really wasn’t.  There’s a Panera Bread in the same shopping center as our Planet Fitness, so after my morning workouts, I stopped a few times and got the bagel.  I think over the course of the month, I had two, my wife had two and the kids got one.  We all usually each have a bagel once per week, anyway, so it really wasn’t that big of a stretch in terms of cost.

At the end of the fifth purchase, sure enough, my wife got an e-mail stating that her card was loaded up with her free Pick-Two.

What Panera Bread Did Wrong (Besides, Well, Everything)

As mentioned above, I typically avoid Panera for anything other than a bagel now and then.  I never really cared for their sandwiches, and had a memory of it being vastly overpriced, but it had been a while since I’d purchased anything other than a bagel, so when my wife suggested that we go for a family dinner to use her coupon, I reluctantly agreed.

My wife was out with the kids, so when the time came, I met them up there.  She had finished placing her order which included her ‘free’ meal, and a grilled cheese sandwich for the kids to split.  Somehow, I found out later that even with her discount, her total still came out to be over $6.  This made no sense to me as all I think she ended up really paying for was the grilled cheese.

$6 for a grilled cheese? 

Well, I didn’t know that until later.  But, as it was, I walked in and was ready to order after she’d already finished.  First, I had no idea what to get.  I looked at the menu and saw a

You'll need some fat stacks to dine regularly at Panera.
You’ll need some fat stacks to dine regularly at Panera.

bunch of sandwiches, which all looked pretty much the same to me with their description.  The soup varieties didn’t look too bad, so I had no problem, but it was the sandwiches that really stopped me.  It was a flustering experience as my wife was on one side, trying to give me suggestions (none of which really took me away from my belief that they were all pretty much the same), and for some reason there were three employees standing in front of the register.

I saw that they had a couple of different things besides sandwiches, and almost thought about getting a pasta dish, I think it was Chicken Alfredo Tortellini or something.  But the price was $7.99 and I figured that the soup and sandwich deal had to be better than that, right?  But the pricing really wasn’t clear, and with seemingly everybody in the restaurant waiting with anticipation for my order, I just picked a sandwich and added some chicken noodle soup.

And I was shocked when the total came up at $9.20.

I asked them to make sure it was right, and they confirmed.  Only afterward did I realize that the Pick-Two is just you ordering two things off the menu.

But, whatever.  I handed over my card and moved over to the order pickup.

That’s where the overall experience went from bad to worse.  Let me count the things that were ‘wrong’ between our two orders.

  • No water – I asked for water with my order but received nothing.
  • To-Go – My order came out on a plate and in a bowl all set out on a tray.  My wife and kid’s stuff came put together in a bag.  They made the whole thing to-go.  So, we had to unpack everything and create a bunch of waste.
  • Roll – When you order soup, my wife specifically asked for a type of roll. Instead, she got two pieces of bread.  They were out of the roll but never asked her what she wanted instead.
  • Price, again (this time for soup) – This one really wasn’t the restaurant doing anything wrong, but came back again to the absurd pricing.  The kids spotted my wife’s soup and wanted it.  Being the amazing mom that she is, she gave them her soup.  When my sister-in-law (who also joined us) asked why she just didn’t get them their own, she answered that there was no way she was paying an extra $4 for another tiny cup of soup.

In the end, after sacrificing her soup, she was still hungry, so she stopped at the Taco Bell next door and got a burrito from their dollar menu.  I, of course, took that opportunity to lament that for the $9.20 I spent on mine, we probably could have all eaten there and been a lot more full, plus saved the money on the $6 grilled cheese and the $1 burrito.

At the beginning, the ‘freebie’ looked like a good deal, and had my wife just gone and gotten it for herself, it probably would have been.  But, it’s amazing that adding two young children and one more adult turned the experience into feeling like we’d been robbed.  There’s just something not right about that.

My wife did say that they seem to use a lot of natural and organic ingredients.  Which is great, but I guess I’ll go back to the grilled cheese.  How organic can two slices of bread and some cheese be to make $6 worth it?  With that in mind, I simply can’t put much justification into the pricing if that’s indeed the argument for higher prices.  It’s still out of whack.

It gave me enough ammunition to reinforce the fact that, but for the occasional $1.49 bagel that I’ll buy now and then, I have no intention of setting foot in a Panera for anything, and it boggles my mind to think that enough people do on a daily basis for them to stay afloat.

Readers, tell me what am I missing?  I know there have to be enough people out there who love Panera and who don’t think their prices are absurdly out of touch with reality, so I’d love to hear from you.  Or, are you like me and think that the value just doesn’t match what you get.

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16 thoughts on “How Does Panera Bread Stay In Business?

  1. What confuses me about Panera is that a “loaf” of soup (the bread bowl) costs the same as soup NOT in a loaf. So no difference even though one style gives you a loaf of bread and the other does not.

  2. First , this is a franchise and there are differences by location and parts of the country. Generally speaking, food costs are less than 25% and giving things free is typical of the business. BTW, food costs are much lower with pizza. When I owned a restaurant, I used to give away new item samples as a way to encourage sales. Typically, you make up a lot with drinks and/or oside items.

  3. Wow!! Here I thought I was the Queen of Rant… But this is magnificent! Outstanding.

    We seem not to have a Panera Bread in these parts…so I gather, from what you say that it’s a chow line? A sandwich shop? What, only six bucks for a grilled cheese? That’s probably not bad…restaurant prices are ridiculous. Around here, anything under about 12 bucks is moderate. But for a total of almost ten bucks, they could manage to serve up your party’s meal in a coherent way, and maybe even give you a glass of water.

    • No, I can rant with the best of them, and why do you think I love your blog so much? Lol.

      It’s the new fast casual restaurant of choice I think. Not fast food but not full service restaurant. They make it ‘fresh’ and hand it over and you go eat. It’s nice and all but I disagree, six bucks is just way too much for a simple grilled cheese. Yeah, it’s probably a little fancier than the one I make at home, but still!

  4. Yes!! It is so hard to look at the (very large) menu and not be able to figure anything out, all the cashiers are looking at you, all the people behind you getting pissy that you haven’t ordered yet (the one by me is busy every time I’ve been there.) Then once I finally figure out what I want they throw in questions like bread/apples and other stuff that I didn’t realize are supposed to come with my order and I hesitate because I don’t know if they are trying to fool me into spending even more money on a $10 soup and sandwich meal. Then the whole pick up from the counter business is so crazy. I’m not a fan.

    • Yes, that was pretty much exactly the experience. I didn’t have anybody behind me but I did have a very fidgety five year old next to me who I was trying to keep from harassing his little sister, so my attention was diverted anyway!

  5. I enjoy a cinnamon crunch bagel as well….but only when someone else happens to bring them as a celebratory treat to work. I’ve eaten there, wasn’t impressed, and vowed never to eat there again. It’s a freaking bowl of soup and a sandwich. There are few things on the planet that are cheaper to make.

    • I had one this morning because the Planet Fitness does bagel day once a month and today was the day, and since they’re in the same center, that’s who they use 🙂

  6. I find Panera’s products so delicious. I love their Blueberry Bagel and Cherry Vanilla Bagel. I think it really depends on the store location, moneybeagle. Have you tried their Artisan Fresh Apple Pastries? I hear it is really good.

  7. I share your “pain” and “wonderment”…..I just don’t get it….Our Panera is always packed and with the prices I simply don’t understand. I met someone for a business meeting and had quite the experience trying to get a regular cup of coffee…with no flavors, sweetners or nectars….And I believe I paid almost $3.00 for the privlege. I did witness a young couple drop almost $30 on basically soup and sandwiches…I felt faint….

  8. I happen to like Panera, actually. However, the prices seem to have gone up – which may or may not be the case, but my perception is that prices have increased.

    I think that a part of the value proposition is that you can get some meals that are not totally unhealthy (excluding the sweets, that is) as in many fast food meals, yet still get the food quickly. The quality just seems better, and at least where we live the places are relatively quiet and pleasant to visit. But yeah, I hear you on the price….as you probably know by now, I’m all for saving money!
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