Restaurant's pay-what-you-want experiment
Customers ordering a bowl of turkey chilli at a St Louis-area Panera Bread cafe can pay a penny, or $5, or $100. In other words, whatever they decide.
Three years after launching the first of five pay-what-you-want cafes, the suburban St Louis-based chain is quietly beginning its latest charitable venture that takes the concept on a trial run to all 48 cafes in the St Louis region.
The new idea experiments with a single menu item, Turkey Chilli in a Bread Bowl, available at each St Louis-area store for whatever the customer chooses to pay.
The new chilli uses all-natural, antibiotic-free turkey mixed with vegetables and beans in a sourdough bread bowl. The suggested $US5.89 ($5.64) price (tax included) is only a guideline. All other menu items are sold for the posted price.
Panera calls it the Meal of Shared Responsibility, and says the potential benefit is twofold: Above-the-cost proceeds go to cover meals for customers who cannot pay the full amount and to St Louis-area hunger initiatives; and for those in need, the 850-calorie meal provides nearly a day's worth of nutrition at whatever price they can afford.
"We hope the suggested donations offset those who say they only have three bucks in their pocket or leave nothing," said Ron Shaich, founder, chairman and co-chief executive of the chain and president of its charitable arm, Panera Bread Foundation.
If the experiment works in St Louis, it could be expanded to some or all of the chain's 1600 bakery-cafes across the US, though Shaich said there is no guarantee and no timetable for a decision.
The first pay-what-you-want Panera Cares cafe opened in the St Louis suburb of Clayton in 2010. Others followed in Dearborn, Michigan, Portland, Oregon, Chicago and Boston.
At those non-profit cafes, every menu item is paid for by donations. Kate Antonacci of Panera Bread Foundation said about 60 per cent of customers pay the suggested retail price. The rest are about evenly split between those who pay more and those who pay less.
The Panera Cares cafes generally bring in 70 to 80 per cent of what the traditional format stores do, Antonacci said. That's still enough for a profit, and Panera uses proceeds for a job training program run through the cafes.
The new idea is fairly low-profile. Shaich said Panera is relying on media reports and word of mouth - no direct marketing, no advertising. Signs in the St Louis cafes will tout the idea, and hosts and hostesses will explain it to customers.
"We don't want this to be self-serving," Shaich said. "We want to make this an intellectually honest program of integrity."
Panera isn't alone. A restaurant known as One World Everybody Eats in Salt Lake City adopted the pay-what-you-want idea a decade ago. Cafe Gratitude, a small vegan cafe chain in California, offers a single payment-by-donation menu item each day.
A study published in Science magazine in 2010 found pay-what-you-want customers will pay substantially more if they know a portion goes to charity. But that same study, led by Leif Nelson of the University of California, Berkeley's Haas School of Business, found that inclusion of a charitable component made people less likely to buy - possibly, Nelson said, because they stressed over the appropriate amount of generosity.
"There is some concern that turkey chilli will simply become a little less popular," Nelson said of the Panera experiment. "On the other hand, I think that those who choose to buy it will be reluctant to pay low prices."
Panera's Shaich is optimistic based on what he's seen firsthand. He worked at the opening of the Clayton store, making food and waiting on customers. He saw well-to-do college fraternity boys leaving without paying a cent, but more often, he saw people being generous. Even those clearly in need dug into their pockets.
"A lot of cynics think Americans are just gaming the system," Shaich said. "Our experience is very different. People do the right thing and are willing to take care of each other."
Source: The West Australian, 2 April 2013
