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Panera Case Study

3856 words - 15 pages

Panera Bread Company is a national bakery-cafe with 1,504 locations across the US and
Canada. This case study provides information regarding the past performance, current analysis,
stock valuation, market evaluation, and industry comparison. In this analysis and case study, we
hope you, the reader, will gain usable insight on Panera Bread and its value. We will give a
recommendation to our readers according to our given information.
Panera Bread is a chain of bakery-cafe quick service restaurants in the United States and
Canada that sells breads, sandwiches, soups, salads, and other bakery items. Its headquarters are
in Sunset Hills, Missouri, a suburb of St. Louis. Panera bread was once originally known as the
St. Louis Bread Company. In 1993, Au Bon Pain Co. purchased the Saint Louis Bread Company,
which was founded by Ken Rosenthal. At the same time, the St. Louis Bread Company was
renovating its 20 bakery-cafés in the St. Louis area. In May 1999, to expand Panera Bread into a
national restaurant, Au Bon Pain Co. sold its other chains, including Au Bon Pain, which is now
owned by Compass Group North America. Au Bon Pain Co. then renamed itself Panera Bread.
The company operates and franchises 1,504 Panera Bread bakery-cafés in 40 states and 17
facilities that deliver fresh dough to the bakery-cafés every day. In its headquarters city of St.
Louis, Panera Bread still operates under the name St. Louis Bread Company. The St. Louis
Metropolitan area has over 100 locations. In 2005, Panera ranked 37th on Business Week's list
of "Hot Growth Companies", earning $38.6 million with a 42.9% increase in profits. In 2007,
Panera Bread purchased a majority stake in Paradise Bakery and Cafe, a Phoenix-based concept
with over 70 locations in 10 states (predominantly in the west and southwest). The Company
purchased the balance of Paradise in June 2009. Panera Bread expanded into Canada, beginning
in 2008 with Richmond Hill, Thornhill and Mississauga, all three in the Toronto area. Panera
Bread is a publicly traded company and is seen as PNRA in the NASDAQ index.

Panera's strategy during the recession has been "to stay consistent and not to react to the
recession"; keeping costs constant and offering new salads and sandwiches. As a result, Panera's
"fast casual" niche (between casual dining and fast food) contributes to its relative success; this
positioning allowed it to avoid discounting wars and maintain its margins by attracting customers
with a higher quality product perceived to be a good value for the money.
The company generates revenue through sales from company-operated stores, fees and
royalties from franchisees, and sales from fresh dough facilities. At the end of 2009, the
company itself fully owned 585 restaurants, which generated $1,152 million in revenues (85.2%
of total revenues). Furthermore, franchisee groups owned 795 additional, franchised restaurants.
The franchises themselves grossed $1376.4M in sales. Although...

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