Panera Bread Opens Smaller Store Focused on Digital Sales

The new format opened in New York, and there are more urban locations on the way.

November 10, 2022

ST. LOUIS—Panera Bread opened an updated urban store format in New York, and the location will be one of several new store formats for the chain that are designed for more densely populated and non-traditional locations.

The urban design is 40% smaller than Panera’s traditional store formats, and features include updated ordering kiosks, a fully digitized menu and a new tracking screen providing more detailed order status. These formats have limited seating, offering some counter seats only, as the design is mostly dedicated to the QSR’s Rapid Pick-Up experience.

Panera says that digital sales now make up half of total system sales and sees more than three million average transaction a week from digital channels including the app, kiosk and web.

“At Panera, our innovation has always been rooted in the guest and associate experience, how we can reduce friction, drive convenience and bring Panera to new places where we know the demand is high for the freshly-prepared food we serve,” said Eduardo Luz, chief brand and concept officer, Panera Bread. “With a flexible portfolio of cafe designs, we’re now able to bring Panera anywhere, from suburban cafes with double drive-thrus, to a digital-only Panera To Go and everything in between.”

Additionally, Panera plans to open its first Panera To Go in New York next month after a successful pilot earlier this year. The Panera To Go format lacks dine-in seating and offers only Rapid Pick-Up and delivery shelves. The fast-casual chain said that lack of customer seating minimizes front-of-house duties so employees can focus more on making food and fulfilling to-go orders.

Both the urban and to-go format stores in New York are the first of several new Panera locations planned for urban markets in the next year, according to the company, along with a series of non-traditional locations in settings like hospitals and universities.

Future iterations of the format will test new tap-and-go technology for a faster, more frictionless experience for the chain’s Unlimited Sip Club members.

For Panera employees, the company is using AI technology to auto reorder ingredients based on sales to labor scheduling and more. Earlier this year, Panera started testing Miso Robotics’ automated coffee brewing system. The coffee system uses artificial intelligence to monitor coffee volume and temperature, and it also houses data, so Panera can analyze what kind of coffee its customers enjoy and when.

Also, Panera has been testing OpenCity’s proprietary voice AI ordering technology, called “Tori,” for drive-thru orders, with the goal of maximizing efficiency and increasing speed of orders.

Panera says that AI additions allow employees to focus on customer service and order fulfillment.

Last month, Panera updated its loyalty program to include choice-based rewards. Panera’s loyalty program, MyPanera, now allows members to select their reward from multiple options based on their personal preferences, instead of a single, pre-selected reward.

The company says the new benefit is rooted in MyPanera's relationship-based loyalty program, where rather than a transactional points system, members are rewarded based on frequency of visits, spend and their individual purchases and preferences.

MyPanera began in 2010 and has nearly 48 million members. Panera said its program is “rooted in the belief that the job of a loyalty program is to deepen the guest relationship by meeting both a guest's rational and emotional needs.”

A recent Harvard Business Review study on loyalty programs found three takeaways for loyalty programs. NACS Magazine dove into loyalty programs and how they can provide convenience retailers with key consumer insights and a competitive edge.

NACS offered a free webinar that shows retailers how to improve their current loyalty program.