After giving socialism a try, and having failed miserably, Panera Bread announced it would be closing what they termed a “pay what you can” restaurant, the last on in Boston, on February 15th. The restaurant was part of Panera’s recent stab at socialism, and the location was a member of their non-profit concept. However, the restaurant could not remain viable, so Panera has officially announced it will be closing.
In a report by Eater, it was revealed that the concept involved five different Panera locations, and when all was said and done, none of the sites could prove to be viable or self-sustaining. The original program, titles Panera Cares, was started in 2016, approximately nine years ago. The idea was to implement a somewhat form of socialism, offering to serve food to low-income people. With a pay what you want ideology, the patrons would eat for the price of a donation that they determined.
When asked about the concept in 2010, Panera’s founder Ron Shaich explained simply that the program was intended to be "a test of humanity. Would people pay for it? Would people come in and value it?" It would seem that the answer is simply "no." The proof is that less than a decade later, none of the five Panera care’s locations in the “test” have operated in the black.
Panera also stated that through the nine-year history of the project, several of the locations were swarmed and mobbed by both homeless individuals and students who would eat and then would not donate. Because the mobbing at one of the sites became so frequent and so severe, the restaurant had to start limiting the number of meals designated for homeless to only a few meals each week.
When the finances of the locations were all examined, it appeared that Panera, a Portland-based business, was showing only a 60% to 70% return on its total costs paid out. The company stated the primary factor in the low performance was indeed the homeless and the students. Because of the continual losses, and the lack of effectiveness with the socialist experiment, the company owners soon became discouraged and even somewhat jaded. This, In turn, cause an overall sour atmosphere to develop from the top executives down to the actual restaurant workers.
Panera has stated that they are working closely with the bakery-café members at the Boston location set to close the 15th, working towards placing them in other employment opportunities with Panera.
So, what’s the verdict—you decide.
Was Panera’s socialist “test” doomed from the jump?