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Home » Panera Chairman Says Competitors Were Wrong to Accent Cost-Cutting During Recession

Panera Chairman Says Competitors Were Wrong to Accent Cost-Cutting During Recession

November 10, 2010
Business Week

Since the end of 2007, about the time the U.S. recession began, Panera Bread has boosted revenue 24 percent and added 191 café-bakeries to its 1,421-unit chain-all while increasing its worksforce by 20 percent with the hiring of 4,661 extra workers.

Asked what Panera did differently to get the U.s. consumer to spend again, executive chairman and founder Ronald Shaich said his approach was the exact opposite.

"Panera has, for a very long time, played for the long term and stayed consistent. Going into the recession, we said, 'This is a time to continue with our strategy.'

"Almost every single one of our competitors said, 'We need to pull costs out.' As a consumer, if you walk into their restaurants, the lines are longer, the waits are longer. You have a table next to you with dirty dishes. That is the effect of increasing labor productivity. It has to come out of somewhere.

"We've continued to invest in labor in our cafés and the quality of our people. We've invested in the quality of the food. When everybody pulled back and we did more, the difference between us and our competitors went up.

"And we've been taking market share. We had near double-digit [same-store sales] for over a year now. The stock has tripled in the recession."

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