Panera Pulls Pay-What-You-Can Experiment From Stores

| by Jonathan Wolfe
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Restaurant chain Panera’s pay-what-you-can experiment will be pulled for a temporary time and revised before it’s brought back as a seasonal special.

The experiment, called the Meal of Responsibility, let customers buy a turkey chili mill served in a bread bowl, but with a twist: customers could pay whatever they could afford for the meal. The idea behind the experiment was that poor customers could get a healthy meal for cheap while more wealthy customers would pay more than the suggested $5.89 retail price to offset the difference from customers who paid little for the meal.

The program is being pulled for the time being while Panera figures out how to better advertise the deal.

"We were very capable of raising the level of awareness about food security in short spurts," Panera founder and chairman Ron Shaich said. But as employees stopped telling customers about the deal “it seemed to fall into the background. We decided the best thing to do was pull it and retool it.”

When the experiment first started, media advertising and employee enthusiasm helped customers to, over the first three weeks, pay even more for the meals than Panera’s suggested retail price. But after the initial blitz, revenues dropped to around75% of what Panera hoped to earn from the program.

Shaich said that once the program is rolled back out, it will be implemented in a few select markets as a four to six week special.

"We'll be very upfront where we can pay it forward and help each other," he said.

The experiment was the first time Panera tried out a pay-what-you-can format at its for-profit cafes. A similar program has been in place at non-profit Panera Cares cafes since 2010. Panera says that 60% of customers typically pay the suggested retail price at the cafes, while the other 40% are split between paying higher or lower rates.

The non-profit cafes make about 70-80% of the money that a standard Panera location does. 

Sources: NBC, Huffington Post