Panera’s Pay-What-You-Want Restaurant

Last month, Panera opened a nonprofit restaurant in St. Louis. Instead of being charged normally for the food, customers are told to pay what they want. Essentially, the cashiers tell customers their orders’ suggested price based on the menu, and then they can spend as much, or as little, on the food as they want. There was much skepticism over how fair people would be in paying for what they ordered and whether the store would be able to sustain itself.

The results are in, and Panera has announced that they will be opening more of these pay-what-you-want restaurants. According to Panera’s chairman, about 60 to 70 percent pay in full, about 15 percent leave a little more and another 15 percent pay less, or nothing at all. A handful have left big donations, like $20 for a cup of coffee.

It’s interesting that this store was able to turn a profit, but not entirely surprising. The store is a new concept and has been around a month, so people might pay more than they usually would because they want the store to succeed, but how many times will they eat there before they think they deserve to cut down on their costs? This first month of business also doesn’t take into the account the group of homeless and people out of work or short on money that may flock to the store for the free food. Panera has strategically placed the store in an affluent neighborhood, not far from the courthouse and business offices, but I feel that it will take more than just one month of business to decide whether or not this could be a successful store.

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1 Comment »

 
  • Joao Pedro Afonso says:

    I agree. People might be reacting to the novelty. First they’ll explore with care to see what is socially acceptable, and after gaining some insurance, they’ll proceed to abuse the concept. It is an interesting bet because of the location (from what you are telling us): image is essential in businesses, and businessmen do not want to appear financially weak in front of their peers (a funny advertisement now running in my TV is a couple, very impressed by a new car until they hear the price… “do you think we are going to spend only that? Humpfff!” and they go way). They might use the restaurant to show precisely they can afford to pay more than what is asked.

    Of course, I’m regarding the prospects of its potential as a real business… which is not, since it is supposed to be non-profitable.

    PS.: I still don’t know what is smoothies.

 

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