Panera Bread’s socialist pay-what-you-want restaurant, Panera Cares, will officially be closing shop on February 15 due to the business model’s unsustainability. No DUH. It doesn’t take a savvy businessman (Or woman) to know that profits keep the doors open.
According to The Daily Wire, while Panera Cares billed itself as a “non-profit” restaurant designed to feed low-income people, the business model was anything but. Rather than create a charitable organization that distributes food to needy families or a discount outlet or even a $1 menu (like every other fast-food restaurant), Panera tried to create a socialist system in which meals were offered at a suggested donation price. That means some people would pay more while others would pay less based on what they felt like or could afford. By not simply offering food at a low price (hat-tip, Dollar Tree), Panera completely removed any incentive for patrons to meet even the lowest standards of consumer/retailer exchange. The result: some people paid their fair share while others enjoyed a “free lunch.”
The Eater reported that 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 to 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.
The concept was never sustainable, to begin with. It’s a nice idea but just like every socialist project, it was doomed from the start. Someone has to pay – period.