When Panera Bread makes a move, the food industry typically takes notice. So the company’s announcement on Monday that it will expand its delivery services across the country — to 897 cities — is sure to put more than a few fast casual chains on watch.
Panera delivery isn’t new to Bostonians. The company started its pilot delivery program out of the chain’s Fenway location in the Landmark Center back in 2012, said chief executive Blaine Hurst, who, along with executive chairman Ron Shaich made the first deliveries on bicycles. The move is part of “Panera 2.0,” the company’s push into apps, kiosks, and other digital technologies, and the effort has helped bolster its catering offerings. It reported $1 billion in online sales last year, accounting for 26 percent of its overall business.
Unlike many other restaurants adding delivery service, Panera is employing its own drivers, rather than relying on third-party delivery services like GrubHub or Uber Eats.
“This is a core part of our business, this isn’t an extra add-on,” Hurst said.
Customers place orders through the Panera app or online, and are charged a $3 delivery fee.
In test markets, he said the company is seeing anywhere from an additional $5,000 to $7,500 a week in delivery sales, tallying up to as much as 10 percent increase in store revenues. In high-performing markets, stores are employing as many as a dozen drivers to accommodate the lunch rush.
Hurst said that Panera’s food travels well and provides customers with healthy options for lunch meetings. But he’s hoping that the expansion of delivery nationally will also get people to place orders at breakfast and dinner. “People don’t think Panera at dinner,” he said. “We do think there is an opportunity, including around college campuses and more technologically savvy communities.”
Restaurant delivery sales hit $16.4 billion nationally in 2017, according to the NPD Group, and is anticipated to make up 40 percent of all restaurant sales by 2020, according to Morgan Stanley analysts. Panera was acquired by the firm JAB Holdings in 2017, and reported $6 billion in system-wide sales that same year.Janelle Nanos can be reached at firstname.lastname@example.org. Follow her on Twitter @janellenanos.