A write-up that I recently read about Panera Bread’s expansion plans provided hope within this troubling economy (see: “Panera Looks to New Venues in Expansion,” Reuters, 3/19/09). A national bakery chain with a well-developed brand name, good quality ingredients, convenient and competitive food offerings, and lots of room for growth, What Time Does Panera Bread Start Serving Breakfast has created a formula that will help guarantee solid returns for a long time. Panera currently has 1,250 locations with plans to open yet another 80-90 locations this coming year, a rise of around 7% of its current locations. In California, Panera has just 80 locations, so there are considerable opportunities within that state alone. Since becoming wholly independent from Au Bon Pain Co. in 1999, Panera’s stock has grown thirteen fold, and in 2006, was recognized as the top performer in the restaurant category for one-, five- and ten-year returns to shareholders, so it’s success is nothing sudden – it has been growing slowly and steadily.

Personally, I adore Panera. The bread is freshly baked, the menu offerings are well-thought out, the atmosphere is inviting and warm, and also the price is reasonable…and, I personally can’t consider a fast casual cafe chain which comes even close to winning vs. Panera on some of those dimensions. Au Bon Pain was developed on the same premise that brought Panera success – hospitality, quality, fresh baked goods – but it is, in my opinion, a pale comparison. Take as an example, hospitality – in Panera Bread Holiday Hours, you happen to be given a beeper while waiting for your food, so there is not any confusion whenever your food is ready and in some cases, someone behind the counter will go out of their way to bring your food for your table. The food is served on actual plates with real silverware and the seating includes comfortable booths and cozy armchairs. In Au Bon Pain, the silverware is plastic, the chairs are stiff and you must bring the food to your table yourself and also the order process involves a less personal approach of submitting a form and handing the form to the order taker. In terms of quality and freshness, Panera also wins hands-down. The bread is served right out of the oven and they sell their baguettes to take home, something that Au Bon Pain either will not do or does not effectively communicate which it does.

Most of us know how a hot sandwich can bring out the ingredients’ flavors – Panera understands this and provides paninis – a style of grilling sandwiches that has become extremely popular. At Au Bon Pain, instead of paninis, it provides ‘hot sandwiches’, which can be sandwiches which are continuously kept warm within heat lamp. If you’ve ever had food that is kept warm that way, you’ll know it just doesn’t taste very good or very fresh. For a place that promotes the standard and freshness of its breads, Au Bon Pain simply qxuhyp not do nearly as good work executing. Finally, as far as I can tell, Panera also wins on value. At Panera Bread Complaints, your order of any sandwich automatically comes with a bag of chips along with a pickle thrown in and they also smartly provide a half-sandwich and soup or salad combination, popular with health-conscious customers. At Au Bon Pain, virtually every ingredient is line-itemed and you also certainly don’t have the pickle…leading to a tab which is almost always$1-$2 more. So, what went wrong with Au Bon Pain? In 1999, it went public and then got shuffled around to several private equity groups. It certainly hasn’t changed much over time and hasn’t tried to improve its offerings relative to Panera’s.

Perhaps, due to its success over time and a lack of a significant competitor, it hasn’t were required to. But, let’s get real – in a health conscious, quality, value driven economy like the one that we live in – where would you rather choose lunch?

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