Panera Bread, a popular American bakery and cafe, is undergoing a major renovation.
According to reports from Business Insider, Panera Founder and CEO Ron Shaich predicts a “tech revolution” is upon the restaurant industry, and says that Panera Bread is steadily joining the movement.
The company is in the process of rolling out improved and digitalized versions of their current cafes, referred to as “Panera 2.0s.”
Shaich spoke about the digitally-renovated cafes during the company’s third quarterly earnings call, explaining that Panera 2.0 “…is about improving guest experience and reducing friction.”
According to Shaich, 2.0 cafes include digital access on mobile and web devices so customers may place orders on-the-go. Ordering kiosks have also been placed within the establishments.
The improvements are aimed at providing customers with a superior dining experience, whether the customer is dining out or plans to stay and eat inside a cafe.
Questions have been raised as to whether digital kiosks will begin to replace human labor within the workplace.
“We did our digital capabilities–that’s part of 2.0, to give a better guest experience,” Schaich said in the same call. “It was never about labor. Having said that, it’s a powerful beneficiary. Labor is going down…and as digital utilization goes up, like the sun comes up in the morning, it is going to continue to go up.”
James Sherk, a research fellow in labor economics at The Heritage Foundation, addressed fears that Americans may have regarding labor automation and technology in a recent report.
“Many Americans worry that automation will significantly reduce the need for human employees,” Sherk wrote. “This is highly unlikely to happen. Automation reduces the need for humans in particular tasks, but employees have historically moved to different sectors of the economy as a result. Little evidence suggests this time is different.”
According to Panera, the company had suffered rising labor costs throughout their third quarter operating margin. Panera’s profit and loss statement, according to Chief Financial Officer Mike Bufano, showed that “labor cost was again the most significant driver of operating margin decline.”
Statutory increases in minimum wage along with inflation and benefit costs associated with the Affordable Care Act were noted by Bufano as two of three factors “contributing to the labor deleverage.”
When asked by analyst Sharon Zackfia of William Blair how the company would deliberate with pricing in regard to the structural labor dynamics in the industry, Shaich responded:
“I think we all understand public policy has evolved … there may not be a federal wage increase, but there is absolutely a national wage increase happening in patchwork fashion across the country … it’s going up significantly.”
Shaich noted that in Emeryville, Calif., Panera saw the effects of the $15 wage increase that was voted upon by City Council.
“We saw the usual cast of characters that we usually compare ourselves to, Starbucks and Chipotle, take price immediately to cover that,” he said, referring to the practice of raising menu prices to cover increased labor costs. “We did as well.”