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Panera’s Utopic Pay-What-You-Want Restaurant Dream Is Dead

The last remaining Panera Cares is closing in Boston

Panera Cares/Facebook

Nine years after introducing pay-what-you-can restaurants to several U.S. cities, Panera Bread is admitting defeat and closing down its last remaining non-profit Panera Cares location. The Massachusetts restaurant will shutter on February 15, according to Eater Boston.

The chain opened its first donation-based community cafe in St. Louis, Missouri, in 2010. 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.

At its peak, Panera Cares operated five locations, including ones in Dearborn, Michigan; Portland, Oregon; Boston, and Chicago. Each restaurant was designed to sustain itself, but the restaurants weren’t financially viable. The Portland-based Panera Cares was reportedly only recouping between 60 and 70 percent of its total costs. 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.”

“We had to help them understand that this is a café of shared responsibility and not a handout,” Shaich said in a 2011 interview about the Portland location. “It can’t serve as a shelter and we can’t have community organizations sending everybody down.” Some visitors noted in online reviews that the restaurant began to feel unwelcoming to the very people it aimed to serve, suggesting that Panera maybe didn’t care about community-building as much as its original goal suggested. Patrons reported security guards roaming the entrance and “glaring at customers.” 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.

By 2016, the Panera Cares experiment appeared to be winding down. The Dearborn restaurant shuttered in 2016, followed by the Chicago and Portland locations. Panera was sold to a private equity firm, JAB Holding Company in 2017. Shaich stepped down as CEO of the fast-casual chain in January 2018, around the same time that the pilot Panera Cares in St. Louis closed down. Shaich told the St. Louis Post-Dispatch at that time that all the Panera Cares restaurants together served roughly 2 million meals during their operation, but “the nature of the economics did not make sense.” With only one location left in Boston, Fast Company rang the death knell of the pay-as-you-go experiment last June, with official confirmation of the final closure coming earlier this week.

“Despite our commitment to this mission, it’s become clear that continued operation of the Boston Panera Cares is no longer viable,” JAB Holdings wrote in an emailed statement to Bloomberg. “We’re working with the current bakery-cafe associates affected by the closure to identify alternate employment opportunities within Panera and Au Bon Pain.”

Where Panera Cares may have failed, the pay-what-you-can restaurant model has proven itself viable in some cases. Denver-based restaurant SAME, which helped inspire Panera Cares, opened in 2006 with the goal of allowing every customer to dine with dignity regardless of their ability to pay full price. The restaurant is continuing to fulfill that mandate today, proving that there is occasionally such a thing as a free lunch.

Panera Will End Its Pay-What-You-Want Test, Closing Boston Store [Bloomberg]
Panera Is Closing Its Last Pay-What-You-Can Location [EBOS]
How Do Pay-What-You-Want Restaurants Work? [E]