Yet another aftershock of increased restaurant competition and digital intrusion appears to be the race for all-day visits. From Dunkin’ and Starbucks in the afternoon to Burger King at breakfast, brands are designing menus and models to drive transactions into lagging dayparts. The first reason is an obvious one—today's slower traffic trends require chains to court stickier consumers (especially considering guests are willing to spend more these days). The other is the reality that technology opened accessibility points in places they didn’t exist before. Delivery, arguably the most prominent example, has allowed many lunch-heavy chains to surge dinner and late-night sales. Consider Krystal Burger as one case study. When you hear about delivery’s incremental effect, it’s often from this approach: It was a customer, or business, we weren’t getting before. So it’s probably more accurate to envision delivery sales as frequency filling a void rather than stacking up on peak orders. Of course, this changes by the chain, and much of that has to do with which daypart they already own. Also, the quality and awareness tied to the process.
One of the most vivid displays of this concerns 2,300-unit Panera Bread. First, in April, the fast casual relaunched its breakfast strategy to compete for a.m. guests, often considered the most loyal among younger consumers. This involved grinding coffee beans in house and putting the process on display, akin to top coffehouse rivals, and introducing expanded menu items as well as technology-fueled convenience.
It’s worth pointing out the backing of owner JAB Holding, which agreed to buy Panera for $7.5 billion in April 2017. JAB runs Peet’s Coffee, Caribou Coffee, Espresso House, Stumptown Coffee Roasters, and Jacobs Douwe Egberts. It also holds a roughly 71.5 percent stake in Keurig Dr Pepper (JAB owns Krispy Kreme as well). One of the first things the parties discussed, per reports at the time, was the branding of Panera’s coffee. Rather than simply agreeing to a licensing deal with one of its coffee giants, JAB encouraged Panera to lead with its own brand. To get there, Panera is giving coffee stations a makeover, launching cold brew, and rolling out a new line of hot coffee—a fresh light roast and a dark roast. The changes are expected to arrive by late summer.
Then, last month, Panera announced it was testing a dinner menu in Lexington, Kentucky, followed by another pilot in Providence, Rhode Island. It encompasses 10 new items available from 4:30–10 p.m. Chief growth and strategy office Dan Wegiel said Panera asked itself where it was going to get the most out of its value creation. Where would the brand—and the customer—be in 10 years? And if technology continues to accelerate, which it will, it’s likely the daypart discussion will blur even further. Convenience will extend from speed-focused to at-home demand to evergreen delivery. Guests want food when they want it, where they want it. Will brands be positioned to deliver that promise?
Placer.ai, a mobile location analytics platform, took a look at Panera’s foot traffic and compared it to other options to see if the proposed menu change can unlock all-day success.
Let’s start with the midday. The company analyzed Panera’s visits from June 2018 through June 2019. It found that Panera maintained steady performance, regardless of location. Apart from significant decreases on holidays, like the Fourth of July and Thanksgiving, Panera’s chart really didn’t fluctuate much.