Panera intensifies breakfast competition by adding delivery
- Panera announced last week that it will add breakfast delivery in 381 cafes, according to a company release. The company already offers lunch and dinner delivery in nearly 75% of its system via its own delivery fleet, which began in 2014, Forbes reports.
- As part of the service, participating cafes will deliver orders of $5 or more for a fee. Breakfast hours will vary by location.
- Panera CEO Blaine Hurst told Fortune that breakfast currently accounts for about 20% of Panera’s business.
With this announcement, Panera is clearly taking advantage of two major demands — breakfast and delivery. According to NPD Group, breakfast is the only meal of the day that has grown in the restaurant space. And, despite the overall weakness in the U.S. restaurant industry, foodservice delivery posted sizable gains in both visits and sales over the last five years — with a 20% increase in delivery sales and 10% gain in delivery foodservice visits.
Takeout with direct delivery from a restaurant — as is Panera’s model — is expected to reach $32 billion this year, according to CHD expert.
Leveraging such trends is giving Hurst plenty of confidence about this expanded rollout. He told Forbes that delivery has been one of Panera’s largest growth initiatives in the “last 10 years,” adding that “2019 is the year of breakfast at Panera.”
That’s not to say that breakfast delivery will be an automatic win for Panera, however. Technomic research indicates that the quick-service segment continues to drive breakfast purchases — averaging 3.9 breakfast visits per month. This is compared to 2.5 visits to coffee shops and 1.3 visits to fast casual restaurants — where Panera squarely falls — and 2 visits to full-service restaurants.
Moreover, breakfast seems like a climb for delivery adoption, as the morning daypart is largely based on habituation, whereas delivery is largely driven by a stay-at-home economy. Other than weekends (and unlike dinner), a growing number of consumers aren’t typically home for breakfast, but are instead on-the-go.
Can Panera make delivery a top-of-mind need for breakfast, specifically? Perhaps. With 20% of sales in the morning daypart, breakfast is very popular at the restaurant chain, so the demand is there. The company has also been on a roll in the digital space, doubling its digital sales to $2 billion in 2018 year-over-year, according to Nation’s Restaurant News. Digital sales now account for about 33% of the company’s systemwide sales. Those numbers bode well for a company that is increasing access to its popular breakfast platform via delivery.
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