Panera Cares Closes Last “Pay-What-You-Can-Restaurant”
The article below was originally printed in The Blaze and details the spectacular failure of the “test of humanity” conducted by the founder of Panera. It turns out people won’t magically pay their “fair share” when there is no accountability. By effectively reducing the price of the meals to nothing, demand skyrocketed and the company hemorrhaged money, and eventually had to cap the number of free meals it would give to the homeless.
The move comes after the business’s “nonprofit” restaurant concept became unviable. On Tuesday, Eater reported that none of the restaurant’s five locations was self-sustaining.
What are the details?
The program, Panera Cares, was initially created to serve food to low-income people nine years ago in 2010. The concept was a pay-what-you-want business model in which patrons visiting the restaurant could eat for a donation.
In 2010, Ron Shaich — the company’s founder and former CEO — said that the program’s aim was a “test of humanity.”
“Would people pay for it?” he asked during a TEDxStLouis talk. “Would people come in and value it?”
The answer was apparently “no,” because here we are less than a decade later, with no Panera Cares’ franchises running in the black.
The outlet also reported that through the project’s nine-year run, many of the locations were “mobbed” by homeless people and students who ate without donating. Because of the “mob,” one location was forced to limit its homeless patrons’ meals to a few per week.
“The Portland-based Panera Cares was reportedly only recouping between 60 and 70 percent of its total costs,” Eater’s Brenna Houck wrote. “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.'”
Eventually, Panera Cares apparently became jaded by the lack of response to the socialist experiment, and the restaurant atmosphere began to sour, according to Houck.
“Patrons reported security guards roaming the entrance and ‘glaring at customers,'” Houck wrote. “People working with at-risk residents described incidents during which they were rudely told off by managers for ‘abusing the system.'”
“Others,” Houck added, “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.”
What did the company say?
In a statement to Bloomberg, Panera Bread 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.”
Shaich stepped down as the company’s CEO in 2017, and told the St. Louis Post-Dispatch in 2018 that “the nature of the economics did not make sense.”