In another example proving that socialist economic models don’t work, Panera Bread is closing the last store that was part of the chain’s socialist “pay what you can” program because they’ve all become financially unsustainable.
The chain announced this week that it would be closing its Boston store Feb. 15 after it, too, failed to turn a profit. In fact, it wasn’t even close.
On Tuesday, Eater reported that none of the restaurant’s five “non-profit” locations was able to generate sufficient revenue to remain open.
The program was called “Panera Cares,” and it was designed to serve food to low-income people when it was launched nine years ago. The ‘pay-what-you-want’ business model allowed patrons visiting the locations to eat for a donation — or not.
In 2010 when the program was launched Ron Shaich, Panera founder and CEO, said it was to serve as a “test of humanity.”
“Would people pay for it?” he asked during a TEDxStLouis talk. “Would people come in and value it?”
Judging by the closure of all five locations, the answer would have to be a resounding “no.”
The retail chain also noted that throughout the nine-year existence of the program, Panera Cares locations were “mobbed” by homeless people and students, all of whom ate without donating a penny. In fact, because of the existence of a “mob,” one of the locations was forced to limit homeless people to just a few meals every week.
“The Portland-based Panera Cares was reportedly only recouping between 60 and 70 percent of its total costs,” Eater’s Brenna Houck wrote. “The losses were attributed to students who ‘mobbed’ the restaurant and ate without paying, as well as homeless patrons who visited the restaurant for every meal of the week. The location eventually limited the homeless to ‘a few meals a week.'”
Houck noted further that over time Panera Cares officials became jaded by those who took advantage of the chain’s hospitality without recompense and as such the atmosphere among workers in the locations began to sour.
“Patrons reported security guards roaming the entrance and ‘glaring at customers,'” Houck noted. “People working with at-risk residents described incidents during which they were rudely told off by managers for ‘abusing the system.'”
“Others,” Houck added, “described situations in which visitors trying to participate in the pay-as-you-can system feeling shamed for not being able to afford the suggested donation amount.”
In a statement to Bloomberg, Panera Bread officials said, “Despite our commitment to this mission, it’s become clear that continued operation of the Boston Panera Cares is no longer viable. We’re working with the current bakery-cafe associates affected by the closure to identify alternate employment opportunities within Panera and Au Bon Pain.”
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