Just a day after President Trump blasted socialism in his State of the Union speech, news of another socialist experiment’s failure is going viral. Panera Bread had implemented a “pay-what-you-want” restaurant model. As it turns out, the company didn’t bring in the revenues it expected. It wasn’t even covering costs.
The Panera Cares, located in Boston, will close its doors on Feb. 15. The restaurants, five of them, were established as “nonprofits,” yet they expected to be able to pay their bills. They couldn’t. None of the locations were self-sustaining. The Boston location is the last one still open.
“The chain opened its first donation-based community cafe in St. Louis, Missouri, in 2010,” Eater writes. “Under the model championed by the company’s founder Ron Shaich, the restaurant operated like a typical Panera, but offered meals at a suggested donation price, with the goal of raising awareness about food insecurity. ‘In many ways, this whole experiment is ultimately a test of humanity,’ Shaich said in a TEDx talk later that year. ‘Would people pay for it? Would people come in and value it?’ It appears the answer is a resounding no.”
So much for the test of humanity.
Food in these restaurants was served with a suggested donation.
“The Portland-based Panera Cares was reportedly only recouping between 60 and 70 percent of its total costs,” Eater adds. “The losses were attributed students who ‘mobbed’ the restaurant and ate without paying, as well as homeless patrons who visited the restaurant for every meal of the week. The location eventually limited the homeless to ‘a few meals a week’.”
From the start, the chains were not frequented by many who were willing to the suggested donation. Fewer still paid more than the suggested amount.
“Patrons reported security guards roaming the entrance and ‘glaring at customers,'” Eater added. “People working with at-risk residents described incidents during which they were rudely told off by managers for ‘abusing the system.'”
“Others described situations in which visitors trying to participate in the pay-as-you-can system feeling shamed for not being able to afford the suggested donation amount.”
That’s humanity for you.
“Despite our commitment to this mission,” Panera said in a statement, “it’s become clear that continued operation of the Boston Panera Cares is no longer viable. We’re working with the current bakery-cafe associates affected by the closure to identify alternate employment opportunities within Panera and Au Bon Pain.”
Panera and Au Bon Pain, it is worth noting, both charge for the food they serve.