Slicing%20the%20Bread%20but%20Not%20the%20Prices%20%28Panera%20Strategy%29

Slicing%20the%20Bread%20but%20Not%20the%20Prices%20%28Panera%20Strategy%29

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Slicing the Bread but Not the Prices While Rival Restaurants Offer Discounts, Panera Focuses on Employed Eaters Willing to Spend While other recession-wracked restaurant chains offer meals for as little as $5, Panera Bread Co. has this deal on its menu: a lobster sandwich for $16.99. Panera has been bucking conventional industry wisdom during the downturn by eschewing discounts and instead targeting customers who can still afford to shell out an average of about $8.50 for lunch. The St. Louis-based chain of 1,400 cafes says it has been able to persuade customers to pay premiums because it has been improving the quality of its food. "Most of the world seems to be focused on the Americans who are unemployed," says Panera Chief Executive Ron Shaich. "We're focused on the 90% that are still employed." While second-quarter sales at stores open at least one year were flat, same-store sales at company-owned stores rose 2.8% in the first 27 days of the current third quarter. Panera is projecting growth this quarter in its operating profit, average customer check and number of transactions. Panera's results contrast with those of many other casual-dining chains, which have been posting negative same-store sales, due partly to declining traffic and lower-priced food. Some have found that discounting has not only hurt margins, but failed to lure as many customers as hoped. Brinker International Inc. tried a promotion offering smaller portions of menu items for under $7
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Slicing%20the%20Bread%20but%20Not%20the%20Prices%20%28Panera%20Strategy%29

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