Two more Panera To Go stores are scheduled to open in Southern California and Washington, D.C. later this year. Correnti says the chain is also exploring New York City. When customers or third-party delivery drivers enter, they simply walk to pick up their order from to-go shelves. The restaurant will serve all dayparts, and may potentially add digital kiosks and a catering channel in the future.
These initial restaurants will be corporately owned. After evaluating results, franchisees may open their own digital-only locations. Panera has about 2,100 restaurants in 48 states and Ontario, Canada, with close to a 50/50 split between franchises and company-owned units.
Sales volumes will depend on the market, but won’t be the same as a traditional suburban outlet. Although Correnti couldn’t go into too much detail, he notes Panera has a “very clear indicator” of what it needs to do from a sales perspective, and the brand is optimistic about the new prototype’s potential. With the vast majority of staff placed in the back of house, the unit is able to leverage labor costs that are multiple times fewer than a traditional bakery-cafe. Also, due to its size, buildout costs are lower.
“Because of all those different factors, our average weekly sales hurdle is very different than a traditional cafe,” Correnti says. “ … We've opened up one of them and we love the insights that we've heard so far and how our guests want to experience our products, whether it's through pickup or delivery and how they're embracing that digitally enabled only contact. So as we learn more through this process, we're going to expand it. We're going to expand, whether it's going to incorporate kiosks or if there's a market need for catering, we want to incorporate that in there also.”
Currently, Panera has roughly 86 cafes in urban markets. The chain believes it can double that presence, and it will leverage multiple store types to do so. If the brand is unable to enter an area with its NextGen cafe and double drive-thru, it turns to a slightly smaller urban-centric unit with limited seating and a cashier. In scenarios where that design doesn’t work, Panera will flex down to its digital-only prototype.
The final path is ghost kitchens, which have provided a significant amount of insight as to how operations work best in a strictly digital environment—learnings that were used while Panera developed its to-go-only store. There are five ghost kitchens open, and six more will make their debut before 2022 concludes.
Correnti says that at its core, Panera is about the fireplace and sense-tingling bakery that greet customers in the dining room, but the chain’s commitment to off-premises dates back years before the pandemic arrived.
Rapid Pick Up launched nationally in 2016, and just a couple months after nationwide shutdowns in the spring of 2020, the brand rolled out curbside pickup. Additionally, by the end of 2021, 44 percent of restaurants included a drive-thru.
Because of that history, opening Panera To Go wasn’t a heavy lift in terms of digital infrastructure. It’s just a matter of real estate and filling in holes where demand is unmet.
“It's a way for more guests to get access to the food that we serve—which is clean, freshly prepared—in the areas that we haven't been able to get to in the past,” Correnti says. “So our guests have created these new habits over the past two years, and one of them is more off-premises dining. We're in a good position to take advantage.”