Panera is rolling out delivery at restaurants across America

Hollis Johnson

Panera Bread is rolling out delivery at hundreds of its restaurants across the US.

“We’re in full roll out mode – this is no longer a test for us,” Panera CEO Ron Shaich said in a presentation at the ICR Conference on Wednesday.

Shaich said that the company plans to add delivery at 35% to 40% of the chain’s roughly 2,000 locations by the end of 2017.

“For us, delivery is a mass-market opportunity,” Shaich said.

According to Shaich, Panera has a menu that is well-suited for delivery.

“It’s not because we’re smarter [than our competitors] – we’re blessed,” Shaich said. Blessed, according to Shaich, with a menu of soups, salads, and sandwiches that are easy to transport, much like pizza.

Panera began rolling out delivery in early 2016. Roughly 15% of Panera locations now offer delivery, exceeding the company’s original plan to add delivery to 10% of stores by the end of the year.

Panera’s digital investments should make adding delivery a more seamless process for the company.
Hollis Johnson

The fast-casual chain began exploring delivery five years ago. Panera investors have been pushing the company to add delivery at restaurants, especially following the successful roll out of Panera 2.0, a tech initiative that built the chain’s digital ordering system for Panera’s app and in-store kiosks.

“With Panera 2.0 effectively implemented across the company base, investor attention has turned to the implementation of delivery, which our delivery model suggests will annually contribute ~1-2% same store sales and 2-3% to [earnings per share] growth through 2020,” Cowen and Company analyst Andrew Charles wrote in his nomination of Panera as a “best restaurant stock pick” of 2017.

Panera’s kitchen crews can treat delivery orders the same way they would treat take-out orders.The only added costs are those associated with the actual delivery process, which Shaich said add up to roughly $3 to $3.50 per order. Panera charges a delivery fee of around $3.

Panera said its average delivery order is $22, while its average to-go order is $9.