According to sources familiar with the decision, Panera Bread Co. is considering a possible sale after receiving interest from at least one buyer. Panera operates a nationwide chain of bakeries specializing in soups and sandwiches and is worth approximately $6.5 billion dollars. While a potential deal has not been confirmed, a source has identified firms such as JAB Holding Co., Domino’s Pizza Inc., and Starbucks Corp. as interested parties. Of these companies, only Domino’s has denied interest.
Rumors of the deal signal increasing industry interest in the fast casual space, which provides healthier and higher quality items than traditional fast food, as several restaurant chains have grown their investments. Darden Restaurants Inc., which created Olive Garden, announced it plans on acquiring Cheddar’s Scratch Kitchen for $780 million. Panera itself has seen consistent revenue growth but has not been profitable. It aims to compete with Chipotle to be the signature fast-casual brand and intends to be the first chain to label added sugar amounts on its fountain beverages.
Should one of the potential suitors actually acquire Panera, the larger amount of capital it will have access to will allow the company to better compete with Chipotle, whose image has yet to rebound from its E. coli scandal, and further widen the availability of fast casual options. For Starbucks, the acquisition would allow it to dramatically expand its food offerings and move beyond just being a coffee chain. The firm is considering expanding into lunch, and Panera would provide it with a myriad of sandwiches and bread bowls to sell in its stores. Sandwich lovers could have much to be excited about in the future.
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