Will they succeed? Penera Bread red diaper, tree hugging, pink commie style!

[verytwistedmind.livejournal.com]

"I'm trying to find out what human nature is all about," says Shaich, 56, who has converted a former Panera-owned restaurant in an urban area of St. Louis into a non-profit restaurant dubbed Saint Louis Bread Company Cares Cafe.

"I'm trying to find out what human nature is all about," says Shaich, 56, who has converted a former Panera-owned restaurant in an urban area of St. Louis into a non-profit restaurant dubbed Saint Louis Bread Company Cares Cafe.

http://www.app.com/article/20100518/BUSINESS/100518019/Panera-Bread-experiments-with-Take-what-you-need-pay-what-you-can-store-model

What do you think? Will they succeed? I like this story, there us a certain defiance about it. A rich corporate big wig doing exactly what he wants with his store and his money. The libertarian in me loves this. The capitalist in me is doubtful.  

This reminds me of the Bagel Man story in the book Freakonomics: http://pricetheory.uchicago.edu/levitt/Papers/WhatTheBagelManSaw.pdf

Not the same moral lesson but such out of the box thinking in regards to retail sales. It also shows what happens when people have the option not to pay for something..

It also reminds me of the story of Thanks Giving.

The colony's leaders identified the source of their problem as a particularly vile form of what Bradford called "communism." Property in Plymouth Colony, he observed, was communally owned and cultivated. This system ("taking away of property and bringing [it] into a commonwealth") bred "confusion and discontent" and "retarded much employment that would have been to [the settlers'] benefit and comfort."

The most able and fit young men in Plymouth thought it an "injustice" that they were paid the same as those "not able to do a quarter the other could." Women, meanwhile, viewed the communal chores they were required to perform for others as a form of "slavery."

http://www.heritage.org/Research/Commentary/2005/11/Pilgrims-Beat-Communism-With-Free-Market

Are there any examples of such a business working?

p.s. For those who take umbrage with the title, it was meant in jest.

Comments

[rasilio.livejournal.com]

I think this can succeed reasonably well, especially given where they located the store. Had they chosen a poor neighborhood it would be a different story however.

This is not to say poor people are any worse than rich people, they simply have less money. In a rich neighborhood people can afford to worry about appearances as well as being able to afford to be generous and will therefore be far more likely to "overpay" for their meals and far less likely to contribute significantly less than the production cost of it. In a poor neighborhood however there would be few people who had the spare cash to pay extra and many people who had little choice but to use the store as a form of soup kitchen and contributing little or nothing to their meals.

Given the demographics of the location I think it is possible, especially since the store is setup as a non profit and therefore will not have to pay taxes and have far lower operating costs in other ways (for example using day old baked good from other Panera stores in the area) that this could end up being at least as profitable as a typical Panera store.

What I do not think would be possible however would be to roll out such a business model on a large scale, as in an entire chain, because such locations would be magnets for the dishonest people who would eventually discourage at least some of the participation of the honest ones. One or two locations per city however as an adjunct to the main chain could turn out to be quite profitable.

[verytwistedmind.livejournal.com]

Good points. I showed this article to 3 of my liberal female friends and they swooned over it. They said they'd go and pay extra. So you may be on to something.

[gunslnger.livejournal.com]

Also, they may say that they would, but I would bet $20 that they wouldn't do so consistently.