Panera thrives as competitors weaken

on Tuesday, November 9, 2010

Panera thrives as competitors weakenThe U.S. restaurant industry has suffered mightily since the recession hit, with sales dropping 2 percent just last year. Panera Bread, however, has come out of the recession in a better position than before it began, hiring more than 4,600 workers, opening 191 new stores, and growing revenue by 24 percent – all since the end of 2007.

In an exclusive interview with Bloomberg Businessweek, Panera's Executive Chairman, Ronald Shaich, explained Panera's growth through a commitment to its long term plan. While competitors pulled back, Panera "did more." Competitors cut costs and employees, while Panera, conversely, "continued to invest in labor . . . and the quality of the food."

Shaich also asserts that the "best time to grow is in a recession," while the worst "is in the boom days." During the boom, Panera reigned in real estate standards. They negotiated with landlords and stores opened in 2009 and 2010 will go "down as some of the highest [return-on-investment] cafes" built.

Panera also successfully implemented better quality foods, like a lettuce program that increased the quality of salads to that of "the Four Seasons." Through its commitment to a higher-quality food, better service, and an adherence to its long term goals, Panera has prospered during the economic downturn.

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