Panera Bread Keeps Rising Despite Recession

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If you've found yourself waiting longer to be seated, served and possibly even to pay for a meal at your favorite mid-level restaurant these days, it could be a side effect of the same cost squeeze affecting so many industries.

But while some eateries suffering from a loss of business have chosen to cut costs on food quality, menu options or service staff, Panera Bread is taking the opposite approach. In an article published online at Bloomberg.com, executive chairman Ronald Shaich describes how the 1600 unit chain has intentionally kept its growth intact and how it tries to differentiate itself from other restaurant operators.

"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 the results have been dramatic. Since the end of 2007 when the recession began, Panera Bread has boosted revenue 24%, added 191 stores and increased their workforce by 20%. In comparison, the U.S. Restaurant industry saw same-store sales drop 2% in 2009 while the casual restaurant segment suffered an even worse decline of 4.7%.

The article is a great read and I highly recommend it. It shows how really sound thinking and marketing strategy can deliver exceptional results even facing severe competitive challenges. And while they had some significant financial advantages from previous successes to bolster them when conditions worsened, they've made the most of their opportunities to create even more competitive distinction because others retreated.

This story is just one more illustration of the fact that when presented with a host of dining options that are all relatively equal, consumers will select the brand that communicates and delivers a distinctly higher level of value. That's what good brands do for a business. Any business. Consumer or Commercial.

Read the full article on Bloomberg.com.

To talk to someone about developing more competitive distinction through your brand, contact us today by e-mail or phone 903-534-5220.