This week, Panera learned that socialism isn’t sustainable.
Now, to be clear, Panera itself is okay – but it’s “pay what you can” restaurant chain
called Panera Cares, is shutting down its last living location after being mobbed by
students looking for free food.
The Panera Cares cafes were originally opened in 2010 as a “non-profit venture” by the
Panera Bread Foundation and were expected to be totally self-sustainable.
They set up shop in Dearborn, Michigan, Portland, Chicago, Boston, and St. Louis.
Currently, the Boston location is the only one that still exists, but it’s set to close
on February 15 – simply because, according to founder Ron Shaich, “the nature of the
economics did not make sense” and “the model wasn’t sustainable.”
Instead offering outright free food, or at least low priced food like every dollar menu
at pretty much every fast food restaurant, Panera labeled each menu item with a “suggested
donation” price that equaled the retail price of the meal, or asked for an hour of
volunteer work to pay for the meal.
And, if you were super lucky and looked high income enough, you were asked for double the
retail price.
According to the Panera website, the cafes were supposed to raise awareness about food
insecurity by asking customers to pay their fair share – those that could afford it
were asked to pay more and subsidize other meals, those at the middle of the road were
asked for retail price, and everyone else wasn’t asked to pay at all.
Unfortunately, at the end of the day, even though Panera stressed that the cafes weren’t
meant to provide a handout, it being a handout is exactly what happened.
Because people weren’t actually REQUIRED to pay anything, most people didn’t - After
all, why pay for something when you can get it for free?
The cafes were reportedly “mobbed” by students taking multiple meals without paying,
homeless people came as if it were a soup kitchen, and neighborhood crime went up, despite
some of the cafes sitting right next to luxurious hipster establishments like Trader Joe’s.
It seems the worst of it happened in the Portland, Oregon location, which didn’t go a single
month without losing money.
The cafes started having to train staff to kick out anyone who showed up drunk or on
drugs, hire security, limit student visits to after typical school hours, shorten their
business hours, and eventually told the homeless they were only allowed one meal and one drink
per week, a move that came after limiting them to “a few meals a week” continued
to fail.
While the cafes billed themselves as non-profit restaurants, the founder admitted in a 2010
TED Talk that the cafes were really a “experiment in humanity” and an attempt at a socialist
business structure – a structure where those who could afford the meals would be told they
had a responsibility and obligation to take care of less fortunate patrons, complete with
a verbal assault about ethics the moment people walked in the door.
It kind of makes sense - because if the real goal had simply been to feed the poor and
hungry, the cafes could have simply offered their meals at a flat discount, or offered
them all for free.
Much of whatever Panera doesn’t sell each day is either thrown out, taken home by employees,
or donated to local shelters anyway – why not offer those same day old bagels at their
Panera Cares locations?
But no, instead it was an attempt at researchers call “consumer responsibilization” – meaning,
an attempt to make consumers take on social responsibility during their shopping experience
and turn them into moral subjects rather than just customers.
And surprise, research has found that most people don’t like that and find it really,
really uncomfortable.
It probably didn’t help that, according to reviews, customers who did pay were often
only given half of a typical Panera portion, were rudely told by cashiers not to short
them any money, or were publicly shamed into paying more than what they had already put
in the donation box.
Other reviews complained that when they only paid retail, and not more, employees would
point them out to other customers, calling them names.
One review, from a woman living in her car, recalls when she donated fifty cents and was
told it wasn’t enough, had her meal taken away, and was told she could only have a pastry
for that price.
Yet another review claimed the woman, who worked with low income and at-risk populations,
brought her clients to the café to explain the system and encourage her clients to give
what they could for the food.
She was then cornered by three managers, accused of abusing the system, and harassed to the
point of tears.
On top of it, these cafes looked identical to regular Paneras, so it ended with a lot
of confused customers wondering why they were suddenly being asked to pay double for their
meals.
Some people might look at this failed “experiment in humanity” and think it means people are
just awful, greedy, and selfish.
But I don’t think the results mean humanity sucks or is inherently bad – I think it
means the people experimenting with humanity don’t actually understand humanity.
Humans are incentive based creatures.
Our very brains and biology work on a series of incentives and rewards.
Robbing Peter to pay Paul, or in this case, forcing Peter to pay for Paul all the while
telling Peter he’s a wealthy jerk is not going to make ANYONE want to pay for Paul.
It doesn’t even leave Peter with the warm and fuzzy charitable feeling because he’s
being told his donation proves that he’s a wealthy jerk that could have always given
more.
There is absolutely no incentive here to do good.
If you’re going to pay $10 for a sandwich that costs $5, you might as well go somewhere
else where you can get more food for your money and not be harassed for it.
And if your goal is really to feed the poor and hungry, surprise!
Your primary customer base is going to be the poor and hungry.
So between that, and giving no real tangible reason for a customer to double up their money
for a gourmet fast food grilled cheese, you’re not going to have enough paying customers
to stay afloat.
Thinking otherwise is just a stupid and completely ignorant business model.
Panera Cares adopted its own version of the Marxist slogan “From each according to his
ability, to each according to his needs” and proved it’s a horrible business model
and an equally horrible social model, because it takes away any incentives, punishes those
that are perceived to have “more,” flat out makes people feel bad, and in the end,
makes sure there’s not enough to go around
for anyone.