Panera Bread palm scanners ‘provide another level of convenience, personalized service’: CEO

Panera Brands CEO Niren Chaudhary joins Yahoo Finance Live to discuss a partnership with Amazon to test palm-scanning technology, the state of the consumer, inflation, and the outlook for the company.

Video transcript

SEANA SMITH: Well, you can now pay for your Panera sandwich with the palm of your hand. You heard that right. The restaurant chain partnering with Amazon to test its palm-reading payment technology. See it right there on your screen. Right now, it's only available in two St. Louis locations. We want to bring in Niren Chaudhary, Panera Bread's CEO. Niren, a lot to get in with you today. But first, let's start with this technology because I think a lot of people-- Brooke DiPalma is also here playing in this interview as well. But, Niren, how exactly does this work? Because it might scare a lot of people.

NIREN CHAUDHARY: Yeah, it's-- thank you. It's great to be on the show. Well, we are very excited that we are the first restaurant company to partner and launch Amazon One for loyalty identification or payment transactions just using a scan of your palm. We're excited because we have more than 50 million members in our loyalty program, and this just provides another level of convenience and personalized service for our guests. So it's another one of the firsts from Panera, leveraging technology to delight our guests.

BROOKE DIPALMA: And just to get a timeline on this, what are your expectations, and when do you expect it to become a common way that customers pay for their Panera?

NIREN CHAUDHARY: I think use of biometric identification is happening all around us, as we know, in airports, et cetera, and supermarkets already. So I just see this as a natural evolution of using biometric technology to drive convenience, loyalty identification, and payment. So I think this is going to spread pretty quickly.

DAVE BRIGGS: This is clearly one indication. But just about every restaurant, sir, has come out of this pandemic different. They have evolved in some way, shape, or form. How are you a different chain than you were two years ago?

NIREN CHAUDHARY: Oh, yeah, we have evolved tremendously. I think we are a much stronger brand. We are more convenience-driven in terms of off-premise convenience. We are more digitally savvy. And we've also done a lot of innovation to make the brand even more relevant to our guests across all multiple dayparts. So I think we are a stronger brand, more convenient, more accessible, more distinctive for our guests. And that's a mindset. You know, we look at any kind of a macro event that is happening as a way to become a catalyst for us to up our game and serve our customers even better than we've done before.

BROOKE DIPALMA: And another key theme over the past year has been inflation, particularly food inflation. We've seen egg and bread prices higher. Has Panera bread had to raise prices? And are you seeing lower ticket sizes?

NIREN CHAUDHARY: Yeah, I think the macro environment with inflation, supply chain disruptions, et cetera, continues. I think it's a very uncertain choppy environment out there, very difficult to really predict where this will land. So our approach is to actually use pricing as a strategic lever to cover not only our food inflation, but also the labor inflation, the labor investments that we need to make to take care of our people. So we are pricing to cover both of those elements.

And in fact, I think the results have been very strong. So we are able to actually retain our people. We have best in class people metrics, very low turnover rates for our cafe general managers. So our cafes are properly staffed. The consumer demand for our brand remains relatively strong. And therefore, we continue to have a pretty strong start to the year. Although, we are very aware that it's quite hard to tell how this will turn in the latter half of the year.

SEANA SMITH: Niren, have you seen any pushback from those higher prices?

NIREN CHAUDHARY: You know, we are perhaps one of the few chains that is seeing a growth in our foot traffic and transactions. And the reason is that as we raise prices, I think it's very important to give value back to our guests in some distinctive way. And we do that all the time. So we recently launched a very disruptive value play called The Unlimited Sip Club, wherein we offer unlimited access to our beverages for 10.99 a month. So when the guests are coming to the cafes using this unlimited Sip Club program, they already feel that they are actually saving and they're benefiting from this the value initiative.

And those initiatives, in combination with pricing, is very important for us to ensure that we are serving our guests appropriately during this time. So we are seeing actually a growth in both our ticket but also our transactions, which is good to see.

BROOKE DIPALMA: And speaking of this macroeconomic environment, it truly seems like Panera is waiting for the right time to go public. What can you tell us about the status of that public offering? And can we expect it to happen this year?

NIREN CHAUDHARY: I think it's very hard to really say. As you know, the environment continues to be very-- very difficult to predict. So I think we are watching it very carefully, and we will take an appropriate decision at the right time.

SEANA SMITH: Niren, is it still an opportunity to go public given the uncertainty that's out there right now?

NIREN CHAUDHARY: I think in the near term, I think it's very hard to think about what the right timing is. It certainly remains our intent, but I think the timing is uncertain.

SEANA SMITH: Niren Chaudhary, always great to have you, CEO of Panera. Thanks so much. And of course, our thanks to Brooke for joining in as well.