The downfall of Panera Cares reveals a dark reality that is still haunting the fast-food industry
- In 2010, Panera opened Panera Cares, a nonprofit arm of the fast-casual chain where visitors could pay whatever they could afford.
- Almost nine years later, only one store remains open, as they faced a number of challenges, many rooted in its basic concept of having people who could afford to pay for their meals eating alongside those who couldn't.
- Finding the balance between good intentions and practical reality is a common battle in the restaurant industry.
- To hear the full story of Panera Cares, subscribe to Business Insider's podcast "Household Name."
In 2010, Panera's founder and longtime CEO Ron Shaich was convinced he had discovered the perfect way for the chain to give back.
The plan: open Panera Cares, a nonprofit arm of Panera where visitors could pay whatever they wanted, allowing people without money for food to eat a hearty meal similar to what they'd get at other locations of the chain for free. The first location opened in Clayton, Missouri, and it was one of four that ultimately opened across the country."Our whole idea here was not simply to create another homeless shelter or another soup kitchen," Shaich told Business Insider's podcast, Household Name. "It was actually ... to have a real meal and a real meal with dignity."
Today, almost nine years later, only one Panera Cares remains.
The concept ran into a number of issues, many rooted in its basic concept of having people who could afford to pay for their meals eating alongside those who couldn't.
Employees began profiling customers, judging how much money they could manage to donate. Some customers began to complain about homeless people in the stores, based on their smell and the possessions they brought in the store. Locations were forced to close bathrooms as people injected drugs, leaving messes and blood behind.
These issues aren't unique to Panera. Finding the balance between good intentions and practical reality is a common battle for many restaurants.
Giana Eckhardt, a professor of Marketing at Royal Holloway University of London and author of "The Myth of the Ethical Consumer," told Household Name that how people spend money rarely aligns with their proclaimed values. And, often people don't react to values-driven business decisions the way executives had hoped.
Starbucks is a recent high-profile example of a company facing negative consequences following a values-driven decision.
The coffee chain is installing needle-disposal boxes in select locations, following workers' complaints of improperly disposed syringes. According to some baristas, the number of people using drugs in bathrooms has grown since Starbucks announced its open-bathroom policy in 2018.
"I think the bathroom policy has definitely changed the store's environment," one manager who works at a Starbucks location in Southern California told Business Insider. "It's great that Starbucks wants to try and include everyone, but that means that they include absolutely everyone."
Despite most Panera Cares cafes closing, Shaich still considers the experiment a win.
"You've served millions of people over many, many years," he said. "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."