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Panera Shelving 'The Meal of Shared Responsibility' (PNRA)

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Panera Shelving 'The Meal of Shared Responsibility' PNRA

According to The Associated Press, Panera Bread (NASDAQ: PNRA) is temporarily suspending its ‘The Meal of Shared Responsibility’ program with plans to revamp and bring it back next winter.

The idea is noble and commendable. The program, called, “The Meal of Shared Responsibility,” was a single menu item—Turkey Chili in a Bread Bowl at one of its St. Louis stores. The company set the retail price at $5.89, which included tax, but customers could pay more or less depending on their ability to pay.

The program, geared towards the homeless and those with limited means, provided a nutritious 850-calorie meal at a price they could afford.

To offset the margin pressure on the item, those who were able to afford the full price were encouraged to pay above the retail price.

According to Panera's founder and chairman, Ron Shaich, the company served 15,000 of these meals but there were problems. First, Panera isn’t known to set up shop in economically distressed areas. Most stores are in suburban areas where the demographic is middle-class and wealthy customers. The homeless or otherwise needy, with limited transportation options, weren’t coming to the store for the meal.

Second, after an initially aggressive marketing campaign, awareness of the meal fell pushing it into the background. As awareness dropped and employees stopped explaining the spirit of the program, the average payment went from being above retail value to 25 percent below.

When the program returns, it will be a special offering in select markets that will only last four to six weeks. This will allow it to stay front-and-center in stores until the program ends for the season.

The company already has a similar program that runs on a pay-what-you-can model. These five stores allow customers to purchase menu items by dropping money into a donation box. About 60 percent of customers pay the suggested retail price at these not-for-profit stores.

The rest are evenly split between those who pay less and those who pay more. Each of these stores produce 70 to 80 percent of the revenue of traditional Panera locations.

In 2011, citing the same statistics, Shaich said, "The lesson here is most people are fundamentally good. People step up and they do the right thing."

The company participates in other charitable programs as well. “Operation Dough-Nation” donates unsold menu items to community organizations. Kim Parker, General Manager of a Panera store in Danbury, Connecticut told Benzinga that the store donates nearly $33,000 in unsold product annually and saves used coffee grounds for local school gardens. Across all locations, the food donations reach into the tens of millions.

Disclosure: At the time of this writing, Tim Parker had no position in the company mentioned.

Posted-In: Meal of Shared Responsibility Panera Bread pay-what-you-can Ron ShaichNews Retail Sales General Best of Benzinga

 

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