Years ago, the technology of choice in your local diner was a mini jukebox on the table. Today, it’s a touch screen so you can place your order directly to the kitchen from your table.
That’s what Ron Shaich, founder and CEO of Panera Bread envisions for his 1,946 bakery-cafes in 46 states. Although Shaich is excited about his forward thinking digital plan, his 80,000 associates who he admitted in a recent commencement address “depend on us for steady employment” are less sanguine about the prospect.
Shaich told investors during an analysts’ call this last Wednesday, "Labor is going to go down, and as digital utilization goes up — like the sun comes up in the morning — it is going to continue to go up…. As it happens, it's going to benefit larger organizations like Panera, who already have the technology in place."
Sounds like comments from a hard-boiled business guy, not someone who’s considered a humanitarian running a socially responsible company with a market cap of $4.72 billion.
Last year, speaking at Clark University’s commencement, his alma mater, Shaich admitted he wanted to change the world. And he has taken action against poverty and hunger by starting “Pay-What-You Can” cafes in a number of neighborhoods. He also dropped many artificial ingredients from his suppliers, including preservatives, and meat from animals raised with antibiotics.
But business is still Shaich’s first priority, even though he claims lowering labor costs is simply a side benefit of the technology. "We did our digital capabilities to give a better guest experience. It was never about labor," he said.
Panera’s labor costs rose $20 million in Q3—from $170 million to $190 million.