Panera closing the last of its pay-what-you-can stores

Nearly a decade ago, Panera Bread founder Ron Shaich created a special non-profit offshoot of the company that would offer customers the full Panera Bread menu but without any prices or requirement that they pay at all. In fact, the stores would not have a cash register to ensure that patrons didn’t feel obligated to pay. Shaich gave a Ted Talk in 2010 about the first Panera Cares restaurant and said at the time that he was pleased the effort had shown itself to be self-sustaining. Apparently, there was such a thing as a free lunch.

But this week, the JAB Holding Company, which bought Panera from Shaich in 2017, announced the last Panera Cares store would be closing permanently. From Bloomberg:

The original idea was to allow customers to give a suggested donation for their food in a bid to raise awareness about hunger across the U.S. The funds collected were supposed to cover the store’s operating costs while also paying for those who couldn’t afford their food.

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

It wasn’t just that people didn’t pay enough to cover costs, it was that the free food attracted people who made the entire experience less appealing for others. Last month, NPR did a story on Panera Cares and discussed the unexpected problems with a woman named Sharon Davis who had worked at one of the stores:

BOBKOFF: It fell on employees in these cafes to deal with issues that they weren’t really qualified for, like mental health and drug issues. Sharon Davis worked at the Portland store.

SHARON DAVIS: I was probably one of the oldest people there, so it was kind of like Grandma Sharon type of thing.

GONZALEZ: Grandma Sharon saw the best and worst of people.

DAVIS: There was a customer sitting there. And she comes up, and she goes, oh, my God, these people stink. I can’t stand eating like this. And I said, well, I’m really sorry, but they are entitled to a meal. And you try to be very, very dignified, you know, graceful about it.

GONZALEZ: And the bathrooms, in particular, were a big draw. Customers were doing things in there that Grandma Sharon should not have seen.

DAVIS: There would be quite a few of them that were shooting up in there. When they’d come out the door, you know, they were loaded. And we’d open the door and look, and there’s blood everywhere. So then we’d have to close that bathroom.

BOBKOFF: Sharon says they were trying to do their best. They would refer customers to rehab and shelters and jobs and things like that.

GONZALEZ: But this experiment was really about food. And employees like Sharon told us the real problem was that these cafes weren’t attracting enough generous people who wanted to pay more. So pretty early on, Panera’s cafe started telling customers that if they didn’t have money to pay, they could volunteer for an hour in exchange for a meal – you know, clean under the counters.

You can see how the sights and smells, not to mention blood and drug needles in the bathrooms would lead a lot of the people who could afford to pay to be less likely to choose these locations as a place to have lunch. Also, do you really want to ask homeless people who haven’t showered in a week or longer to pay for their food by cleaning the restaurant? This seems like a potential health problem waiting to happen.

Today, despite the fact that the stores have closed, Ron Shaich still sees it as a success. “This thing worked. You’ve served millions of people over many, many years. And so the fact that at the end of five years – or seven, or eight – we closed the store by no means means that this wasn’t a success,” he told NPR. Here’s Shaich’s Ted Talk about the idea for Panera Cares:

Update: I just noticed that Eater has a story about this which links to some Yelp reviews of the Portland location. Here’s one from 2013:

I love the idea of this place. I actually had dreamed of one day opening a place with a similar concept; so I was disheartened to see the way a “pay it forward” system had been flat out ruined.

I brought my clients to PaneraCares to make them aware of resources available to them should they ever become food insecure-I work with an at risk population. I encouraged them all to pay what they could and they all did. A manager overheard me explaining the system to one of my clients and then cornered me to tell me about people “abusing the system” and that they were having “pressure from corporate.” Surrounded by three managers, I nearly cried.

Here’s one from 2014:

Recently, I’ve been avoiding Panera like the pla[g]ue. Out front a lot of scary homeless people hang out, and hound you for extra money or change. Which as a 5’3 female alone, that’s intimidating and scary. On a recent trip in, I ordered a lemonade with my meal and the lady ringing me up snobbishly told me I’d have to pay full price for this. Leaving me to feel uncomfortable, that she assumed I was going to “short” them on money.

Yesterday, I went in,and while the lady was ringing me up (She was an older lady,I’ve seen a few times) I put my cash in the box in front of the register.She then proceeded to scold me, in front of everyone about waiting to put my money in. I told her I had seen the total on the screen,and wasn’t planning to short her. It left a horrible taste in my mouth,I was incredibly embarrassed and I decided I do not want to return to this location,ever again.