Industry News | June 14, 2017 | By Danny Klein | QSR Exclusive Brief

Panera Bread's Digital Sales to Fly Past $1 Billion

Panera Bread
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Just in case Panera Bread needed any justification for its headfirst dive into digital, the fast casual can now point to one very convincing factor. Or a billion of them. 

Panera announced Wednesday that digital sales, including mobile, web, and kiosk, surpassed $1 billion on an annualized basis. The company expects that to double in 2019.

“By building digital into the core aspects of our business, we’ve transformed the customer journey at Panera,” says Ron Shaich, Panera’s founder, chairman, and CEO in a statement. “For us, it’s not just about new technology for technology’s sake—it’s about making the guest experience better.”

Panera says digital sales represented 26 percent of total company sales at the end of the first quarter. Broken down, that’s around 1.2 million digital orders per week. Overall, sytemwide comparable net bakery-café sales rose 2.6 percent, year-over-year, in the first quarter, including 5.4 percent at company-owned stores. Panera’s revenues increased 6.2 percent to $727.6 million.

The more than 2,000-unit chain has steadily stepped further and further in the digital arena in recent months. The latest commitment came in April when Panera announced it planned to hire 10,000 employees by the end of the year to expand delivery service. Delivery was introduced in early 2015 and offered at around 15 percent of the system when the announcement was made. Panera says it hopes to expand to 35—40 percent of total locations this year.

Panera, which agreed to be purchased by JAB Holding in a $7.5 billion deal in early April, told CNBC it forecasts delivery adding $250,000 per year to each store’s annual revenue of $2.6 million.

Panera’s 2.0 program was first introduced in 2014, as has since grown to include Rapid Pickup, Fast Lane Kiosks, as well as improved catering and delivery efforts.

“When you couple digital innovation with operational integrity, the result is a significant level of digital adoption at the guest level. Our holistic approach to technology pushes us to find new ways to make a difference in the lives of guests, which translates to the kinds of sales we’re seeing today,” says Blaine Hurst, Panera’s president, in a statement.

Panera’s digital ordering integrates with its massive loyalty program, MyPanera, which the company says has more than 25 million members. Guests can earn and track rewards, receive offers, and save favorite menu items.