- Panera’s U.S. systemwide sales fell about 5% in 2024 to roughly $6.1 billion as competition and weakened value perception hurt traffic.
- New CEO Paul Carbone launched the “Panera RISE” turnaround with four pillars—menu refresh, better value, improved service, and network expansion—targeting $7+ billion in sales by 2028.
- The plan reverses prior cutbacks by upgrading ingredients and portions, expanding bakery and lower-caffeine beverages, and investing in staffing and café renovations.
- Panera will close its remaining fresh-dough facilities and shift to frozen/par-baked bread to improve consistency and reach, risking its “fresh” brand identity.
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Financial & Competitive Context
Panera Bread has experienced a meaningful slowdown: systemwide U.S. sales dipped about 5% in 2024 to $6.1 billion from approximately $6.5 billion in 2023. Same-store sales for Panera Brands were down 1.9% in the first half of 2025 versus same period 2024. The decline reflects competitive pressure from fast-casual chains like Chipotle and Panda Express, inflationary pressures, and erosion of its value perception among customers.
Strategic Overhaul: Panera RISE
In response, under CEO Paul Carbone (in place as permanent CEO since March 2025), Panera unveiled a transformation plan dubbed Panera RISE on November 18, 2025. It rests on four strategic pillars:
- Refreshing the Menu: reversing previous cost-cutting measures (e.g., replacing romaine with iceberg; shrinking portions); reintroducing higher-quality ingredients; broadening beverage choice; improving bakery offerings.
- Igniting Value: aiming to make high-quality food accessible, offering a broader range of price points, restoring perceived value.
- Serving Guests with Excellence: investing in front-of-house (staffing, hospitality), renovating café spaces, enhancing service model, and focusing on “Panera Warmth.”
- Expanding the Network: building new locations, modernizing existing ones, streamlining operations via consistency across franchised and company-owned stores.
The company has explicitly targeted sales exceeding $7 billion by 2028.
Operational Changes & Risks
To support this, Panera is phasing out fresh dough production: all fresh-dough facilities will be closed, shifting to external par-baked/frozen bread delivered to cafes. While this is intended to improve supply reliability, reduce stock shortages, and help extend geographic reach, it may risk brand perception tied to “freshness” and bakery craftsmanship.
Reputation, Guest Loyalty & Strategic Implications
Some recent choices, including the removal of Charged Lemonade after lawsuits over health claims, cutting bread production, and quality shortcuts, have tarnished trust. Reversing those changes—returning to romaine lettuce, increasing ingredient richness, expanding drink offerings—signals a commitment to re-earning guest loyalty.
If executed consistently across more than 2,200 locations, the strategy could improve traffic, average ticket size, and margin profile. For investors, this refocuses Panera from cost avoidance toward investment in quality, service, and guest experience. Key metrics to monitor will include same-store sales trends, customer satisfaction scores NPS, cost pressures from food and labor, and capital expenditure against return via new units or remodels. The planned IPO remains on hold until sales improve; success of RISE may be critical for unlocking that possibility.
Open Questions & Risks to Watch
- Can Panera restore its premium / fast-casual positioning while controlling cost pressures, especially in food inflation, labor, and bread supply logistics?
- Will guests respond to frozen/par-baked bread in taste and value perception after decades of fresh-dough identity?
- How effectively can Panera and its franchisees coordinate on consistency of execution—menu freshness, café ambiance, service—in a fragmented, large store base?
- Is the $7 billion sales target by 2028 ambitious but realistic given demand elasticities, rising competition, and economic headwinds?
- How will the cost of renovating and modernizing the store base affect near-term margins, cash flow, and capital return metrics?
Supporting Notes
- In 2024, Panera’s U.S. systemwide sales fell about 5% to $6.1 billion from roughly $6.5 billion in 2023.
- Same-store sales for Panera Brands dropped 1.9% in first half of 2025 versus same period in 2024.
- Panera RISE was announced November 18, 2025 with four strategic pillars and a goal to reach over $7 billion in sales by 2028.
- Menu upgrades include restoring full romaine lettuce, increasing the number of ingredients in salads from five to eight, switching to sliced cherry tomatoes, increasing portions, and enhancing bakery and beverage offerings.
- Service enhancements involve front-of-house staffing increases, modernization of existing cafes, and elevating every customer interaction under the “Panera Warmth” branding.
- Operational transformation includes closing all remaining fresh dough facilities, shifting to frozen or par-baked bread, in part to ensure consistent availability and expand into previously under-served geographies.
- The Charged Lemonade product was discontinued in mid-2024 following health & legal issues; in response, new lower-caffeine beverages like Frescas and Energy Refreshers are being tested.
- As of October 28, 2025, Panera operates approximately 2,239 bakery-cafés across 48 U.S. states, Washington D.C., and Ontario, illustrating scale of the required transformation.
- JAB Holding (≈ 91 % owner) and franchisees are backing the RISE plan; the company has twice explored but not pursued an IPO recently, deferring until performance improves.