An article on the growth of fast-casual dining in today's Times answers the question raised ("Why are there no Panera Breads in Manhattan?") in the comments to this post about a dinner at Panera with my family in Chicago this summer.
The question and answer, as presented by the New York Times:
The modest growth strategy typical of fast-casual chains might be one reason for an absence that many chains find conspicuous in Manhattan: Panera Bread.
Panera, a bakery-cafe, is the most lucrative fast-casual restaurant in the country, according to Technomic, with nearly $2 billion in sales in 2006. Some experts say Panera must enter Manhattan cautiously because a large part of its appeal is a spacious dining room with modern décor. Manhattan real estate will make such arrangements costly. But Ronald M. Shaich, the company’s chairman and chief executive, said he hoped to be in Manhattan within three years.
“I’d rather the legacy of what we do be something that was phenomenal, that customers were raving over, rather than to say that we’re as big as McDonald’s,” he said.
I think we can all get on with our lives now.
Link to the original Times article, if you're interested in knowing how popular Chipotle and Five Guys are.
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3 comments:
The other issue that would make an expansion into Manhattan difficult for Panera is that they require each franchisee to build a commissary that provides all of their stores with dough. The large investment the commissary takes makes it impossible to enter into a market unless you can open a lot of stores FAST. In urban settings like Manhattan real estate becomes kind of a waiting game, waiting for the right space to become available, since there are no gigantic shopping centers that get built every 5 square miles out in the suburbs.
Now that's some nitty gritty information.
Panera has increased media spending behind advertising by 60%+ in 2007 - but is still a local player as it is not completely national at this point. FYI.
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