Fast Casual Restaurant fast casual restaurant is a type of restaurant that does not offer full table service but promises a higher quality of food and atmosphere than a fast food restaurant. In the USA it is a relatively new and growing concept to fill the space between fast food and casual dining. The typical cost per meal is in the US$8–$15 range. Two emerging fast casual restaurants are Chipotle Mexican Grill and Panera Bread. When Chipotle opened its first store in 1993, the idea was simple: demonstrate that food served fast didn't have to be a "fast-food" experience (Chipotle.com, 2010). Chipotle uses high-quality raw ingredients, classic cooking methods and a distinctive interior design. In the past year, Chipotle reached an important milestone of serving 100% naturally raised chicken in all of its U.S. restaurants while increasing the quantity of naturally raised beef to more than 60%. During 2008, Chipotle increased its revenue by 22.7%.
In 1993, Au Bon Pain Co. purchased the Saint Louis Bread Company, which was founded by Ken Rosenthal. At the same time, the St. Louis Bread Company was renovating its 20 bakery-cafés in the St. Louis area. In May 1999, to expand Panera Bread into a national restaurant, Au Bon Pain Co. sold its other chains, including Au Bon Pain, which is now owned by Compass Group North America. Au Bon Pain Co. then renamed itself Panera Bread. The company operates or franchises 1,272 Panera Bread bakery-cafés in 40 states and 17 facilities that deliver fresh dough to the bakery-cafés every day. Panera’s mission is to “make great bread broadly available to consumers across America” (Panera.com, 2008).
For many U.S. companies, 2008 was a year in which the economy collapsed and the stock market fell more than 30 percent. For Panera though, 2008 was a great year — one of the strongest in its history. Panera met or exceeded earnings targets in each quarter of 2008. Additionally, Panera’s stock was up 50 percent in 2008, which made it the best performing restaurant stock of 2008 and the second best performing stock in the Russell 1000 Index (Panerabread.com, 2008). The following trends are prevalent at each company:
- Chipotle’s net sales increased by 22.67% from 2007 to 2008 - Panera Bread’s net sales increased by 21.76% from 2007 to 2008.
- Chipotle’s gross profit margin was 0.68% for 2007 and 2008 - Panera Bread’s gross profit margin was 0.66% for 2007 and 2008
Total Operating Expenses
- Chipotle’s total operating expenses were $1,207,929 and $977,599 for 2007 and 2008 respectively - Panera Bread’s total operating expenses were $1,186,147 and $977,413 for 2007 and 2008 respectively
- Chipotle’s operating income increased by 14.66% from 2007 to 2008 - Panera Bread’s operating income increased by 1.47% from 2007 to 2008
- Chipotle’s net income increased by 10.83% from 2007 to 2008 - Panera Bread’s net income increased by 17.37% from 2007 to 2008
- Chipotle’s total assets increased by 14.25% from 2007 to 2008 - Panera Bread’s total assets decreased by 3.55% from 2007 to 2008
- Chipotle’s total liabilities increased by 26.497% from 2007 to 2008 - Panera Bread’s total liabilities decreased by 30.07% from 2007 to 2008
- Chipotle’s total equity increased by 10.76% from 2007 to 2008 - Panera Bread’s total equity increased by 10.98% from 2007 to 2008
Table 3 outlines specific financial data for each company.
“Panera Bread is the Apple of fast food” (Arndt, M., 2009). The restaurant differentiates itself from its competitors by providing quality fast food in a casual dining experience. “While even Starbucks has jumped on the cheap-eats bandwagon—a 12-oz. coffee and hot breakfast sandwich for just $3.95!—Panera...