Panera Cares No More: Restaurant’s “Pay-What-You-Can” Experiment Fails
In another example proving that socialist economic models don’t work, Panera Cares, the program created nine years ago to “help raise awareness about the very serious and pervasive problem of hunger in the U.S” will now be closing its last “pay-what-you-can” restaurant. As none of the restaurant’s five locations were self-sustaining, the initial aim of the initiative – a “test of humanity” – appeared to have had no sense: Humanity obviously lacks humanity.
Nine years after introducing “pay-what-you-can” restaurants to several U.S. cities, Panera Bread is admitting defeat and closing down its last remaining non-profit Panera Cares location after it too failed to turn a profit. The Massachusetts restaurant will shutter on February 15, according to Eater Boston.
The program was called Panera Cares, and it was designed to serve food to low-income people when it was launched nine years ago. The “pay-what-you-want” business model allowed patrons visiting the locations to eat for a donation — or not.
The chain opened its first donation-based community cafe in St. Louis, Missouri, in 2010. The restaurant’s original concept was fairly simple – menus would have no posted prices, instead offering suggested donation amounts. Patrons were encouraged to pay what they were able, even if that was nothing.
“In many ways, this whole experiment is ultimately a test of humanity. Would people pay for it?” Ron Shaich, the company’s founder and former CEO, asked during a TEDxStLouis talk. “Would people come in and value it?”
Judging by the closure of all five locations, the answer was apparently “no.”
At its peak, Panera Cares operated five locations, including ones in Dearborn, Michigan; Portland, Oregon; Boston, and Chicago. Each restaurant was designed to sustain itself, but the restaurants weren’t financially viable. The Portland-based Panera Cares was reportedly only recouping between 60 and 70 percent of its total costs.
The losses were attributed to students who “mobbed” the restaurant and ate without paying, as well as homeless patrons who visited the restaurant for every meal of the week. The location eventually limited the homeless to “a few meals a week.”
“We had to help them understand that this is a café of shared responsibility and not a handout,” Shaich said in a 2011 interview about the Portland location. “It can’t serve as a shelter and we can’t have community organizations sending everybody down.”
As WBBM reported in October 2012, a local branch of Panera Cares seemed to inundate an area neighborhood with homeless people flocking to free restaurant food.
Over time Panera Cares officials became jaded by those who took advantage of the chain’s hospitality without recompense and as such the atmosphere among workers in the locations began to sour.
Some visitors noted in online reviews that the restaurant began to feel unwelcoming to the very people it aimed to serve, suggesting that Panera maybe didn’t care about community-building as much as its original goal suggested.
“Patrons reported security guards roaming the entrance and ‘glaring at customers,’” Eater’s Brenna Houck noted. “People working with at-risk residents described incidents during which they were rudely told off by managers for ‘abusing the system.’ Others described situations in which visitors trying to participate in the pay-as-you-can system feeling shamed for not being able to afford the suggested donation amount.”
“For guests who cannot meet our suggested donation amount or donate your fair share,” the company now stipulates, “we ask that you limit yourself to one entrée and a beverage per week.”
The restaurant even violates the golden rule of socialism, asking some patrons to actually work for their meal. Customers unable to pay for food “may earn a meal voucher by volunteering for 1 hour per week in our community cafes.”
By 2016, the Panera Cares experiment appeared to be winding down.
The Dearborn restaurant shuttered in 2016, followed by the Chicago and Portland locations. Panera was sold to a private equity firm, JAB Holding Company in 2017.
Shaich stepped down as CEO of the fast-casual chain in January 2018, around the same time that the pilot Panera Cares in St. Louis closed down.
Shaich told the St. Louis Post-Dispatch at that time that all the Panera Cares restaurants together served roughly 2 million meals during their operation, but “the nature of the economics did not make sense.”
In a statement to Bloomberg, Panera Bread officials said, “Despite our commitment to this mission, it’s become clear that continued operation of the Boston Panera Cares is no longer viable. We’re working with the current bakery-cafe associates affected by the closure to identify alternate employment opportunities within Panera and Au Bon Pain.”