We’ve had a bunch of quick-service restaurant stories lately but this one on Panera is too nice to pass up. The Wall Street Journal reports that Panera has lowered its growth forecast in part because of poor customers service — long lines and messed up orders is costing them business (Panera Says It Can’t Handle Crush, Oct 23). So what are they looking to do about it?
Panera plans to modestly pare its menu, which will reduce preparation time. The company also plans to migrate phone orders to the Internet to save time for workers who have to “drop everything” to handle phone orders, Mr. Shaich said.
The company also plans to create dedicated catering hubs in existing restaurants to handle catering for a few restaurants in order to free up the cafes from handling catering orders.
Next year the chain plans to introduce a new menu structure that will group items by price so that people who are looking to save money can easily find lower-cost options.
The parts of this approach that interest me are the changes to order taking as well as the approach to catering. The move to web-based ordering is obviously desirable; taking a person out of the process lowers cost and potentially reduces errors (assuming that the on-line process is sufficiently simple). An alternative would be to run order taking through a call center, which would satisfy customers who prefer talking to someone over using the web. That still keeps a person in the process but would allow Panera to move the order taker out of the restaurant so the process doesn’t slow down in-person ordering. Further, it allows order takers to support multiple restaurants. This may sound like a pipe dream but McDonald’s has tried it with drive thru orders.
The catering change also makes sense since a catering order implies a different scale than a typical walk up order. A lone sandwich order stuck behind a catering order could be in for a long wait. Pooling orders across restaurants into a hub would allow for more efficient staffing. Essentially, handling catering orders is going to require extra staff over and above what is needed to handle walk-in traffic. But those orders are going to sporadic at individual stores. Pooling demand reduces the randomness in orders and assures that the catering crew is well utilized.