In its home area in Missouri, the new franchised units were opened as St. Over the course of its ownership by Au Bon Pain Co. Louis Bread division would enter new markets and continue to grow at a solid clip. Louis Bakery Company units. As concepts, the Au Bon Pain and St. Louis Bakery Company stores were very similar.
Both specialized in high quality foods, served for breakfast and lunch. Their menus included fresh baked goods, made-to-order sandwiches, soups, salads, and custom-roasted coffees as well as other beverages.
The company's targeted customers were principally urban white-collar workers, suburban residents, and shoppers, students, and travelers with busy schedules to keep. The company's chief strategy was to provide high quality, fresh foods at reasonable prices and with greater variety than its chief market competitors.
The 80, square-foot plant tripled the capacity of its older production facility in South Boston. Through the year, the company also continued to test new products and undertook the renovation of some of its stores. Despite its growth and new strategies, Au Bon Pain faced problems in the mid s, including disappointing, sluggish sales.
The rapid expansion of its urban units created operational problems and involved the company in some sour-turning real estate deals. By , the company had logged its first net loss, and in was still struggling to regain profitability.
Hoping to turn things around, late in the company named Robert C. Taft to the newly created position of president. Taft's mission was to direct efforts to improve the operational level of each of the company's units in the company's Au Bon Pain Division.
By the end of , a year in which it opened units in 7 new states, the Panera Bread Company, as it was newly named, was operating in 25 states spread from Massachusetts to Florida and Michigan to Texas. For the first time, too, the majority of the units 86 were owned by franchisees; the remaining 80 were company owned.
As Panera proudly noted, many of the franchisees were either former owners or owners of major fast foot franchises, including McDonald's, Wendy's, Pizza Hut, and Taco Bell. Significantly, Panera no longer had to deal with investors who wanted to open only one or two units. Almost all franchisees agreed to open a minimum of two dozen or so stores, all within a single, entire market area.
As a result, in all of the Au Bon Pain Co. We then focused all of our time, treasure and talent on growing Panera. The s cemented what we call our Contrarian Philosophy. During the go-go years of the early s, we maintained our steady, disciplined rate of growth. We invested in the customer experience — things like design and WiFi, which encouraged guests to linger — and turned Panera into a gathering place.
During the recession in the late s, when most restaurant companies were slowing growth and neglecting the guest experience, we invested in a better guest experience. The result: We built some of the most profitable cafes in our history, took market share from competitors and our stock price tripled. By the end of the decade, there were nearly 1, Panera bakery-cafes. The themes we bet on — digital, clean food, loyalty and multiple channels of access to our products — are now redefining the restaurant industry and we are leading in each of these areas.
He believes that the fixation on short-term profits is jeopardizing the future of American business, and creating social instability that has contributed to our current state of political polarization. They trace it to an essay by the free-market economist Milton Friedman, which ran in the Times Magazine in Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these last decades. The tension between long-term and short-term economic interests has become a favorite topic in policy circles in recent years, but the election of Donald Trump , in , brought the implications into clearer focus.
In the midterm elections, Democrats won at least thirty-eight additional seats in the House of Representatives as of Wednesday , gaining a majority, but Republicans performed better than many people expected; high-school-educated voters came out, once again, strongly in favor of the party of Trump.
According to Shaich, the resentment that these voters feel is a direct result of the quick-profits-over-all ethos that dominates economic thinking. And these guys are closing every plant and squeezing every nickel out of the thing, and Wall Street gets rich. Last year, when Shaich took Panera private, he also stepped down as the C. He has been travelling the country, giving speeches and talking to business leaders and policymakers about the urgent need to return to the tradition of investing for the future.
Some people are starting to listen. Tech titans including Reid Hoffman and Marc Andreessen have financially backed the creation of a new investment framework called the Long-Term Stock Exchange, which would give shareholders greater influence over a company the longer they hold shares.
And innovation and productivity increases occur because people make commitments and they make transformative events. There is an opportunity to ask ourselves, is this what we want? The idea that authoritarianism attracts workers harmed by the free market, which emerged when the Nazis were in power, has been making a comeback.
By Caleb Crain.
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