St. Louis Bread Co. (aka Bread Co.)

[lennykravitz2004]

"Dude, I'm going to BreadCo... you want anything?"

 

 

Panera's pay-what-you-can cafe is a success

More opening up and, perhaps surprisingly, few are abusing the policy

 

Jeff Roberson / AP

Signs explain the pay-what-you-can concept, encouraging charity. Sometimes customers can miss them so an employee greets everyone and explains the policy.

 

By JIM SALTER

 

updated 2 hours 6 minutes ago

 

CLAYTON, Mo. — Rashonda Thornton looked up at the menu on the wall, ordered a Caesar salad and dropped a $10 bill in a box. Pretty generous, considering the meal at Panera Bread Co.'s café in the St. Louis suburb of Clayton sells for less than $7.

 

It was a year ago that Panera converted the Clayton restaurant into a nonprofit pay-what-you-want restaurant with the idea of helping to feed the needy and raising money for charitable work. Panera founder and Chairman Ronald Shaich said the café, operated through Panera's charitable foundation, has been a big success, largely because of people like Thornton.

 

"Sometimes you can give more, and sometimes you can give less," said Thornton, a teacher's assistant. "Today was one of my 'more' days."

Panera, based in suburban St. Louis, has long been involved in charitable giving, donating millions of dollars and giving away leftover food to the needy. But Shaich sought more direct involvement.

 

"We were doing this for ourselves to see if we could make a difference with our own hands, not just write a check, but really make a contribution to the community in a real, substantive way," Shaich told The Associated Press.

 

What developed was the largest example yet of a concept called community kitchens, where businesses operate partly as charities. Panera's success in Clayton has led it to open two similar cafes — one in the Detroit suburb of Dearborn, Mich., and one in Portland, Ore. It plans to add a new one every three months or so.

 

The majority of patrons pay retail value or more. Statistics provided by Panera indicate that roughly 60 percent leave the suggested amount; 20 percent leave more; and 20 percent less. One person paid $500 for a meal, the largest single payment.

 

"From the day it opened, the community has just gotten stronger and stronger in their support of this," Shaich said. "They got that this was a café of shared responsibility."

 

The Clayton restaurant could pass for any of Panera's nearly 1,500 cafes. Soft jazz plays as people chat quietly. Men in suits sit at a table next to women in tank tops. Fresh breads and pastries entice from behind a glass counter. The smell of coffee fills the air.

 

The differences are subtle. Signs explain the pay-what-you-can concept, encouraging charity. One thing Shaich learned was those signs tend to go unnoticed, so cheery employee Terri Barr greets everyone at the door and spells it out.

 

The biggest difference is at the checkout. The menu board lists "suggested funding levels," not prices. Payments go into a donation box, though the cashiers provide change and handle credit card payments.

 

Nicholas James, 34, visiting from California, seemed a bit puzzled as a cashier walked him through the process, before stuffing $15 in the donation box to cover lunch for his friend and himself. The payment was right at the suggested cost.

 

"I think it's great," James said. "I would much prefer to give this place my money."

 

Not everyone is so generous, but that's OK with Brooke Porter, who manages the restaurant. She knows that times are still hard for many. She has seen families down on their luck come in to celebrate birthdays with a meal they normally couldn't afford. A teacher laid off after 25 years stops by on his way to job fairs. He can't afford to pay much but makes up for it by volunteering at the store.

 

"If a man in a suit and tie leaves a dollar for a $10 meal, that's fine," Porter said. "We don't know his story."

 

Only a few take advantage of the system — "lunch on Uncle Ron" as Shaich calls it. He still fumes over watching three college kids pay $3 for $40 worth of food. Generally, peer pressure prevents that sort of behavior, he said.

 

"It's like parking in a handicapped spot," Shaich said.

 

Overall, the café performs at about 80 percent of retail and brings in revenue of about $100,000 a month. That's enough to generate $3,000 to $4,000 a month above costs, money being used for a job training program for at-risk youths.

 

"We took some kids that typically wouldn't be employable, didn't know how to work in society," Shaich said. "We gave them a combination of job training and life skills." The first three graduates of the program are starting jobs at other Panera restaurants.

 

Shaich admitted he didn't know how the pay-what-you-want experiment would pan out. He said the success should send a message to other businesses to put faith in humanity.

 

"The lesson here is most people are fundamentally good," Shaich said. "People step up and they do the right thing."

[wiegie]

I ate there back in the fall--it seems exactly like the rest of their restaurants. I would have never known what it was all about had one of the people I was eating with told me what was up.

[Azazello1313]

hmm. interesting, BUT...

 

Overall, the café performs at about 80 percent of retail and brings in revenue of about $100,000 a month. That's enough to generate $3,000 to $4,000 a month above costs, money being used for a job training program for at-risk youths.

 

am I reading that right? they're generating 80% of what they'd generate if they just charged retail? so if they charged retail, they could bring in more like $20-30K per month above costs. and if they so chose, could give all of that to at-risk youth, soup kitchens, etc. seems like they could afford to feed a lot more people who can't afford it themselves that way.

Edited May 16, 2011 by Azazello1313

[lennykravitz2004]

hmm. interesting, BUT...

 

 

 

am I reading that right? they're generating 80% of what they'd generate if they just charged retail? so if they charged retail, they could bring in more like $20-30K per month above costs. and if they so chose, could give all of that to at-risk youth, soup kitchens, etc. seems like they could afford to feed a lot more people who can't afford it themselves that way.

 

Yes, the money could generate additional funds to donate. Personally, I see it a bit more of a social experiment. Nobody is required to give anything. Yet, for some reason... be it through a social peer pressure, or whatever, people give something "for the good of the community".

 

I read the comments that the founder is "fumed seeing college students eat $30 worth of food for $4", and find it somewhat amusing. He has people "using" the store as intended - deliberate or not - and he get's pissed.

[SayItAintSoJoe]

hmm. interesting, BUT...

 

 

 

am I reading that right? they're generating 80% of what they'd generate if they just charged retail? so if they charged retail, they could bring in more like $20-30K per month above costs. and if they so chose, could give all of that to at-risk youth, soup kitchens, etc. seems like they could afford to feed a lot more people who can't afford it themselves that way.

 

At 80% of possible revenue they're bringing in $3000 to $4000 above cost, so at 100% they'd bring in $3800 to $5000. So the difference is from $800 to $1000. I think.

 

They're also getting to provide a service to some of the more needy folks in the community who otherwise may not be able to enjoy the restaurant.

[Azazello1313]

At 80% of possible revenue they're bringing in $3000 to $4000 above cost, so at 100% they'd bring in $3800 to $5000. So the difference is from $800 to $1000. I think.

 

They're also getting to provide a service to some of the more needy folks in the community who otherwise may not be able to enjoy the restaurant.

 

it said total revenue was $100K per month. if that's 80% of retail, then 100% of retail would generate $125K per month. maybe their volume would slip off a bit if they used a more conventional pricing model, but maybe they wouldn't. now if $100K is $3-4K over costs, then $125K is $28-29K over costs.

 

now, I agree that it's very interesting as a "social experiment". but if the goal is philanthropy and those numbers are accurate, I'd have to say they are coming up short.

[SayItAintSoJoe]

it said total revenue was $100K per month. if that's 80% of retail, then 100% of retail would generate $125K per month. maybe their volume would slip off a bit if they used a more conventional pricing model, but maybe they wouldn't. now if $100K is $3-4K over costs, then $125K is $28-29K over costs.

 

 

You're right. I had their cost going up as well, but in fact it would stay the same.

 

I guess I just see one of your posts and automatically try to shoot holes in it. I guess it's a reflex from the political stuff.