Is Panera the Future of Fast Food?

Panera Bread Company

It’s no secret that the nature of fast food is becoming more and more digital. Just look at Panera where digital orders, either through the smartphone app or in-store kiosks, now account for 22 percent of sales.

Panera’s CEO believes this could well be the highest digital utilization percentage of any public restaurant company in the industry.

Although Panera is setting the pace (and the bar – high), other fast food chains like Taco Bell and McDonald’s are following suit with smartphone apps and kiosks.

So what’s driving such changes? Blame it on rising wages and health care costs. With increases in minimum wages (up to $15), self-service ordering is replacing employees, and saving chains labor costs. These labor costs (32.6 percent of Panera sales, up from 29.4 percent in 2012) are forcing an increase in menu prices (in September 2014, Panera increased menu prices 1 percent; 1.3 percent in 2015; and 2.1 percent in 2016), even despite the efficiency gains self-service ordering can offer.

And this trend shows little sign of stopping.

“We believe the structural pressure on labor costs will likely continue for the foreseeable future,” Panera CEO Ron Shaich told BuzzFeed. Read more