Stroll into any Panera in the country — whether it is in Portland, Ore.,or Portland, Maine, St. Louis, Mo. or St. Augustine, Fla. — and the setting is the same: a wide-open airy space with stylish light fixtures, walls painted in rich red and yellow hues, an assortment of cushy, upholstered seats and perhaps a gas fireplace. The scent of fresh bread baking wafts through the café. Panera’s menu offers hearty $7 sandwiches made on artisan breads, as well as soups, salads and baked goods. It serves its meals on real dishware rather than on plastic plates, and invites customers to sit on elegant wooden chairs rather than in Formica booths.
It is not your average fast food joint. Today, Panera attracts both everyday customers and Wall Street investors; it is one of the fastest-growing chains in the U.S., with 1,420 stores, and a roughly $3 billion market capitalization. During the depths of the downturn, when most companies contracted, Panera’s management invested in its product line and increased the number of stores. The strategy worked: In 2009, the company posted revenues of $1.4 billion, up from $640 million in 2005.
The reason for Panera’s success is simple: The chain has pursued a niche strategy, differentiating itself as a fast food restaurant that serves healthy, tasty, affordable food.