Panera Doubles Down on Delivery

Kristina Peters, Associate Editor, CSP

Panera Bread Co. will more than double the number of its restaurants that deliver by the end of 2017.

About 15% of its locations offered delivery as of last year; Panera plans to grow that to 35% to 40%. It won’t be using third-party delivery services, either: The St. Louis-based company will hire 10,000 employees (in-store and delivery drivers) to get the job done.

“For us, hiring our own drivers was the only way we could ensure that our delivery guests get the same high-quality experience they have come to expect from our bakery-cafes,” said President Blaine Hurst in April.

Delivery will be available from 11 a.m. to 8 p.m., seven days a week, for purchases of $5 or more, plus a $3 delivery fee in most locations.

This is an advantageous move for Panera, says Erik Thoresen, principal for Technomic.

“By having their own dedicated delivery force, they’re able to retain more of the value of the order than if they were to use a third-party delivery service,” he says.

Convenience stores might be wise to consider delivery. Technomic’s 2016 Future of LSR: Fast-Food & Fast-Casual Consumer Trend Report shows 34% of consumers expect delivery at fast-casual restaurants, up from 28% in 2014.

“The thing we know for sure is that consumers in the future will look for things delivered almost

immediately,” Thoresen says. He suggests c-stores use third-party delivery services such as Postmates, DoorDash and GrubHub to test the demand. If it’s there, retailers might find themselves in a position in which having their own dedicated delivery service makes more sense.

“Then you extract additional value out of each transaction because you wouldn’t be paying [third-party-delivery] fees,” Thoresen says.