Panera's 'Pay What You Want' Restaurants Are Working

from the how-about-that dept

Earlier this year, we noted that Panera Bread was testing out a "pay what you want" concept restaurant in St. Louis. It was set up as part of a non-profit charitable foundation, rather than as part of the corporate Panera structure. However, at the time, I noted that I wasn't sure how well it would do, since "pay what you want" for scarce goods seems like a much more dangerous idea. I also pointed out that while I was sure many people would pay the "recommended" prices, and some would obviously pay much less, I doubted many would pay more than the recommended prices to make up for those who paid less. I did note that I hoped to be pleasantly surprised by the results... and now I should admit that I am.

Declan points us to the news that the company is actually expanding the effort, with an expected "pay what you want" opening in Portland. That article also notes that the company has said the original one has been a success. As I expected, the majority of people do just pay the recommended price, with another 15% paying less (or even nothing). But, a separate 15% actually do pay more than the recommended price.

I'm still not convinced this kind of offering works that well in all cases, especially with scarce goods, but I think we're beginning to see scenarios under which it can work. For example, we did recently discuss a study that found "pay what you want" appears to work much better with a charitable component, which is definitely the case here. Separately, we've seen that it can work if you really connect with people, and apparently Panera worked hard to really connect with the local community to make this restaurant work. It'll be worth watching to see if it can replicate that success elsewhere.

Filed Under: food, pay what you want, restaurants
Companies: panera


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  1. identicon
    Jim L, 3 Nov 2010 @ 7:25am

    I love Panera

    I really like Panera. Being someone who works from home I often meet clients there.

    For the price of a cup of coffee and maybe a bagel they let us sit and chat (and use their WiFi) as long as I want. Never once have made me feel uncomfortable for over staying my welcome. Because of that I've gone back many other times for no reason at all.

    This plan to support charity seems like it fits in very well with their main business plan and I would support one if it came to Pittsburgh.

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