Panera Opens Digital-Only Restaurant in Chicago

The location addresses labor challenges and the changing demands of consumers.

June 13, 2022

Panera To Go Digital Location Design

ST. LOUIS— Panera Bread has opened its first digital-only restaurant in Chicago. “Panera To Go” will offer Panera’s Rapid Pick-Up and delivery orders only. Panera plans to open two more Panera To Go test locations in California and Washington, D.C., this year. The stores are designed for densely populated areas that cannot accommodate a dine-in bakery-café.

The Panera To Go front of house does not offer any seating and is currently testing delivery and Rapid Pick-Up on shelves that customers and delivery drivers can easily access. According to Panera, because there are less front-of-house duties and simplified operations, “Panera To Go associates are solely focused on meeting the unique needs of a guest on-the-go.” Panera To Gos are intended to service all dayparts including breakfast.

“We strive to make it easy for our guests to access Panera’s chef-curated menu, in the most convenient way. Panera To Go creates yet another access point for our guests, via Rapid Pick-Up or Delivery, in locations where Panera has not historically operated,” said Eduardo Luz, chief brand and concept officer, Panera Bread.

As of the end of 2021, 81% of Panera’s sales were via one of Panera’s off-premise channels, which are delivery, Rapid Pick-Up, drive-thru and catering, while 49% of sales were digital in the first quarter of 2022.

“We’re in a good position when it comes to this type of format. We’re seasoned vets in digital, so it wasn’t a heavy lift for us to leverage operations and our digital infrastructure. This was a natural extension for us,” Chris Correnti, Panera’s senior vice president and off-premise lead, told Forbes. “We will continue to build on our capabilities. Based on our first location, we are optimistic.”

Panera’s loyalty program has nearly 47 million members, and Correnti told Forbes that its customers are used to accessing the brand digitally, and he expects high usage of these off-premise-only locations accordingly.

“There is an expectation that we are creating new access points for existing and new guests to come into. We’re agnostic on how our customer wants to be served, and we’re building a model that works well for them however they want, whether pickup, delivery or catering. We want to make sure we earn and keep their business and we do that by responding to their changing needs,” Correnti said.

Forbes reports that the menu at the to-go location is slightly different than Panera’s regular menu, and the goal with these digital-only models is to learn and adjust to get the menu and hours as close to a traditional café as possible, including for the breakfast daypart. But to accomplish this, the store will need enough labor, and because the model requires significantly less staffing, this should be achievable, according to Panera.

“This is a labor-light model with no cashiers and no front-of-house to maintain and it doesn’t have a drive-thru,” Correnti said. “For us, it is multiple times smaller (on staffing) than a traditional café. As we go into this test, labor will be predicated on volume, but it is multiple times less.”

Panera recently expanding its unlimited coffee subscription to include self-serve beverages and renaming the program “Unlimited Sip Club.”

“We disrupted the coffee industry and made premium coffee accessible to everyone,” Niren Chaudhary, Panera’s CEO, said in an interview with The Boston Globe. “This is the future.”

Chaudhary says that program members buy coffee eight times as frequently as other customers, and 30% of the time, they add food to accompany their drinks. Compared to customers who don’t participate in the MyPanera loyalty program, coffee subscribers spent up to 11 times as much money in 2021.

“When the beverage is no longer a barrier, customers are attracted to our best-in-class food,” Chaudhary told the Boston Globe.

NACS Magazine dove into loyalty programs and how they can provide convenience retailers with critical consumer insights and a competitive edge in “Just Rewards.”

NACS is offering a free webinar that will show you how to improve your current loyalty program.