According to Eater, after nine years of being in business, Panera Bread’s socialist pay-what-you-want restaurant, Panera Cares, will officially be closing shop on February 15 due to the business model’s unsustainability.
While Panera Cares billed itself as a “non-profit” restaurant designed to feed low-income people, the business model was anything but. Rather than create a charitable organization that distributes food to needy families or a discount outlet or even a $1 menu (like every other fast-food restaurant), Panera tried to create a socialist system in which meals were offered at a suggested donation price. That means some people would pay more while others would pay less based on what they felt like or could afford. By not simply offering food at a low price (hat-tip, Dollar Tree), Panera completely removed any incentive for patrons to meet even the lowest standards of consumer/retailer exchange. The result: some people paid their fair share while others enjoyed a “free lunch.”
Upon opening the first Panera Cares in 2010, the company founder Ron Shaich said the cafe was designed as a quasi-test on human sensibility to raise awareness about food insecurity. “In many ways, this whole experiment is ultimately a test of humanity,” Shaich said in a TEDx talk. “Would people pay for it? Would people come in and value it?”
Panera Cares went on to open five locations in cities like Dearborn, Portland, Chicago, Boston, and St. Louis. None of the restaurants were self-sustaining, with some locations reportedly being “mobbed” by students along with homeless people looking for a free meal.