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Can A New Dinner Menu Catapult Panera To Fast Casual Dominance?

Ethan Chernofsky
June 27, 2019
Can A New Dinner Menu Catapult Panera To Fast Casual Dominance?

Panera Bread, part of the JAB Holding Company, is making a strong move to increase visits by launching a new dinner menu. The fast-casual brand known for salads and sandwiches described the decision as an attempt to widen their reach beyond their current lunchtime focus.

In the words of Dan Wegiel, Panera’s Chief of Growth and Strategy, "when you look at where they're coming to us, it is still disproportionately lunch. There's probably a diminishing return of how many more lunch occasions we can get."

We dug into data from the fast-casual giant to see where the gaps lie and how the coming evening focus could impact performance.

Panera’s Midday Strength

We looked at Panera’s visits from June 2018 through June 2019 and found that the brand has maintained steady performance nationally over the last year. Apart from significant decreases on holidays - July 4th, Thanksgiving, Christmas, and Easter - Panera sees consistent visits to their locations. Indicating a company that creates food with ongoing and regular appeal.

Panera visits nationwide compared to the baseline for the period from June 1 2018 to June 2019

Yet, as suggested, the company does see the largest amount of foot traffic in the lunchtime period. 34.8% of all visits to Panera come between 12:00 and 3:00pm. But to get a true sense of the brands' strengths and weaknesses, we need to compare to other players in the space.

Distribution of visits by hour of day

Evening Fast Casual Distribution

We first compared Panera with another fast-casual giant Chipotle and found that both saw very similar visit trends when compared with their respective baselines for the period.

Visits to Panera (Blue) and Chipotle (Red) compared to their baseline for the period

Yet, digging deeper revealed very significant differences that point to the powerful opportunity available to Panera. Because Panera can effectively serve a morning audience as well, the chain sees over 25% of their daily traffic come between 8:00am to 12:00pm. This is more than 3 times higher than Chipotle, who is dependant on lunch and dinner because of the nature of their menu. Panera also sees an average visit duration that is 26.2% longer than Chipotles.

Percentage of Panera (Blue) and Chipotle (Red) visits by hour of day

All Day Giants

And this points to the particularly exciting opportunity that exists for Panera’s dinner menu - the capacity to turn the brand into an all-day location that can effectively serve an audience morning, noon and night. To find a company that effectively maximizes the full day, we had to go beyond the Fast Casual domain and look into one of the dominant Fast Food players - McDonald's. McDonalds sees a steady level of visits throughout the day from morning until evening. From 9:00am until 9:00pm, no single hour sees less than 4.9% of daily traffic or more than 9.4%. Comparatively, Panera sees a lunchtime peak that rises to 13.4% of all traffic and bottom of 3.5% in that same 9:00am to 9:00pm period.  

Percentage breakdown of Panera and McDonalds visits by hour of day

Why? Because McDonald's has effectively developed a diverse product line that can be consumed throughout the day. This contributes heavily to the fast food giant’s dominance, but also hints at the incredible potential for Panera.

Panera - The King of Fast Casual?

To repeat the words of Panera executive Dan Wegiel “there's probably a diminishing return of how many more lunch occasions we can get." This was the motivation for the brand to expand into a new area of focus with a dinner menu. Should the process succeed, it would empower Panera with a unique capacity to drive visits throughout the day - an appeal reminiscent of the giants of Fast Food.

Yet, Panera has an added weapon sitting in the Fast Casual domain. Unlike Fast Food players or even their Fast Casual competitors, the morning to night appeal is combined with an average duration that beats out pure lunch/dinner offerings. Having a strong breakfast, coffee, and pastry appeal extends the reach of Panera into the morning and early afternoon as an ideal place for a meeting or midday coffee or snack.

The result is a brand that is demonstrating a unique capacity to not only drive visits but to continuously push the envelope to extend its reach.

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