Panera Bread Leaving Downtown Arlington Heights Location

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In October 2013, Motley Fool’s Jon Quast reported on two factors that were hurting Panera Bread.

The first factor referenced stores not being able to complete more transactions during peak restaurant hours. In 2013, Panera estimated that it lost six to 12 customers per day per store as people decided not to wait in line. The Arlington Heights downtown location might not have been the structure that Panera Bread needs to promote efficiency. No space for a drive-thru, and inconvenient parking. The restaurant chain is working on a new format for more efficient ordering and food serving with Panera 2.0.

Panera 2.0 offers significant changes in technology and operations, including allowing customers to sit, place online orders via the website or mobile app on their smartphones, and have food delivered to their table. The 2.0 gradual conversions of the restaurants also include kiosks for ordering, and dedicated areas for picking up to-go orders. It’s possible the location was not compatible with the new Panera 2.0 system requirements. Each capital expense for conversion is estimated at $125,000.

There may have been factors beyond the corporation’s control, as well. At the downtown Panera location, many people complain about the limited 45-minutes parking at the ground level lot. It can also be difficult to find a convenient parking space in the underground garage. Panera might have viewed the restriction as an unfriendly restriction around their restaurant.

Panera Bread 2.0 Overview from Panera Bread.

The second factor involved customer satisfaction and reputation. Customers identified slower service, less comfort, and a rise in inaccurate orders as reasons for lower satisfaction in the Panera Bread experience.

Fast forward to 2015, you find Panera Bread like other companies with more expense troubles. Shares of Panera Bread dropped from about 176 to 155 from Wednesday to today. For the full year, the Panera Bread’s revenue increased 6%, while its profit fell by 9% in the period.

The restaurant chain’s outlook for the year disappointed investors. Panera Bread reported business investments, higher medical costs and increased minimum wages will squeeze its profit margins and that earnings per share could decline in 2015.

Panera Bread is a high-quality company and will be sorely missed in downtown Arlington Heights. But there are many fine restaurants available to serve breakfast and lunch near downtown. Uptown Cafe, Village Grill, and Egg Harbor to the north side of the tracks, and Dunton House and Circa ’57 to the south.

Would Corner Bakery or Chipotle have an interest in the location? Could they make that location work?

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