- Hollis Johnson
As Panera enters its 2.0 era, the company’s business is radically changing.
By the end of the year, the company says that more than 20% of sales will be ordered, produced, and paid for digitally. In some markets, more than a third of sales are already digital and more than 50% of transactions use the MyPanera rewards program.
With the company announcing its fourth quarter earnings today after the market closes, analysts are trying to predict the future of the business – and it looks very different than it did just a few years ago.
“Ultimately as digital orders increases, labor should in theory fall as a meaningful portion of café level labor resides in order taking,” reads a recent Morgan Stanley note on the fast-casual chain. “This could be a long term antidote to labor inflation, though the roll out and start up costs will likely overpower it in the short to intermediate term.”
Essentially, as digital grows, Panera locations will require fewer and fewer employees.
- Hollis Johnson
“Labor is going to go down,” Panera CEO Ron Shaichsaid in Octoberin the third quarter earnings call. “And as digital utilization goes up – like the sun comes up in the morning – it is going to continue to go up. Digital utilization. You are seeing it happen in Panera today.”
Also disappearing from stores: customers.
“Delivery likely gets more attention following PNRA ‘s tests of small order delivery,” reads the Morgan Stanley note.
All Panera bakery-cafes now have rapid pick-up and catering. As customers craving speed dominate the market, you can expect take-away, catering, and delivery to make up an increasing amount of Panera’s business in the coming years.