Panera Bread says it is scoring big on digital sales – USA TODAY
As traditional retailers and restaurant chains struggle, Panera Bread says it has hit a milestone that puts it at the forefront of the digital revolution.
The chain, known for healthy fare like sandwichesÂ and salads, said itsÂ digital sales have soared above $1 billion on an annualized basis and are on track to be twice as high in two years. As a result, Panera says it can lay claim to having the highest rate of digital sales of any non-pizza restaurant chain. But its success isn’t lost on rivals.
Sales from mobile, Web and kiosk made up 26% of the companyâs total sales, Panera said, and an estimated 1.2 million digital orders are placed per week.
“Theyâve been a pioneer in a lot of this stuff. Thatâs theÂ good news,” said Jack Russo, a senior analyst at brokerage Edward Jones. “The bad news is everyone is copying them.”
Panera’s sales claim comes as customers have gravitated to their smartphones for just about every transaction, which they use to order either for takeout or home delivery. As Panera has grown, many traditional full-service eateries have seen their sales decline even as they attempt to cash in on digital sales as well.
Panera said it traces its digital success to an initiative that it began in 2014 calledÂ Panera 2.0, the company’sÂ mobile-payment system andÂ digital-ordering strategy,
“We had always assumed digital will be aÂ third of our business. I’m confident it will be,” said President Blaine Hurst. “The question is how high will it be for Panera? The pizza guys are in the 40s. I could see Panera at 50%.”
Customers can use a computer or mobile device to order food and then pick it up in the stores, a program called Rapid Pickup. The same technology fuelsÂ in-store kiosks where they choose what they want to eat.
St. Louis-based Panera continues to roll out delivery from its stores, a feature that adds about $5,000 in extra sales to existing stores after three to six months, according to Hurst.
“That is 99.99% digital, Occasionally, itÂ takes a phone order. It’s marketed as digital,” he said.
Digital is also a big chunk of Panera’s catering business. In 2014, digital was 15% of sales, Now, it’s about half, Hurst explained.
Panera was an early adopter of digital and that translated into success, because time is money and money is money.
“Everyone is time-starved,” said John Gordon, principalÂ of Pacific Management Consulting Group. For brands that are able to amp up their digital sales, “thatÂ means more profit.”
Panera’s thorough embrace of digital made it attractive to JAB, theÂ Luxembourg investment firm which controls the Krispy Kreme doughnut chainÂ and coffee brands like Keurig and Caribou. JAB is buying Panera for more than $7 billion, paying $315Â per share, and plans toÂ take the chain private.
Other restaurant chains are also getting savvy about looking to digital as a way to attract customers.
Chipotle said its first-quarter digital orders accounted for about 8% of the $1.07 billion in sales — and 8% representedÂ a 53% increase from the same period the year before.
Starbucks and Dunkin Donuts, for example, offer mobile to their loyalty-program members only. In theÂ second quarter, of 2017 Starbucks’ mobile transactions atÂ U.S. companyâoperated retail storesÂ were 29% of total transactions — up fromÂ 24% the same time the previous. For Dunkin Donuts, On-the-Go ordering was close to 2% of total salesÂ during the first quarter of 2017; the company hasn’t released data from the preceding year.
Panera stock closed Tuesday at $314.51, upÂ 11 cents, or 0.03%.
The company,Â as of late March,Â hadÂ 2,042 locations in 46 states and Canada, operating asÂ Panera Bread, Saint Louis Bread Co. or Paradise Bakery & Cafe.
Follow USA TODAY reporter Zlati Meyer on Twitter: @ZlatiMeyer