Panera Bread 2009 Annual Report Download - page 3

2010
As we look forward, we’re confident in our ability to hit our target of 17% to 20% EPS growth in 2010. This is
because success in 2010 will be realized by the work we did on our 2008 and 2009 Key Initiatives. Let’s look at what
you can expect to see in 2010.
To further build transactions in 2010, you will see us focus on differentiation through innovative salads
utilizing new procedures to further improve produce quality. You will also see testing of a new way to make Panini’s
fresh to order. As well, you’ll see us roll out improved renditions of several Panera classics, all while continuing to
focus on ever-improving operations, speed of service and accuracy. We will also continue to execute our marketing
strategy through increased media impressions, improved creative and the potential rollout of a loyalty program.
To increase gross profit growth per transaction and further improve margins, we rolled out an initiative called
the Meal Upgrade Program in late March 2010. This program is intended to build gross profit per transaction while
still providing overall value to customers. With the Meal Upgrade, a customer who orders an entrée (that is to say a
soup, salad, sandwich or You Pick Two) and a beverage will be offered the opportunity to purchase a baked good to
complete their meal at a “special” price point. In 2010, we also plan to test other impulse add-on initiatives, bulk
baked goods and bread as a gift. We also intend to use our strength at purchasing to limit cost inflation in our effort to
drive gross profit per transaction.
Taken together, we believe we have spent the last two years working on the right projects to move our business
forward and we expect to see those efforts pay off in 2010.
The Future
As I announced last year, our Executive Vice President and co-Chief Operating Officer Bill Moreton will
become Panera’s Chief Executive Officer immediately following our annual meeting on May 13, 2010. I will
remain the Company’s Executive Chairman. To be clear, this is not about me leaving Panera, but rather it is my
attempt to begin to explore how I might take what I have learned at Panera to the broader world. Going forward, you
can expect me to focus my time and energy within Panera on a range of strategic and innovation projects and
mentoring the senior team.
Bill and I have been working closely on this transition for the past year and a half and I’m happy to report that
the transition is going very well. The organization is ready for Bill and Bill is ready to lead Panera.
With that said, this is my last letter to you, at least as CEO. As I now reflect on my 28 years with Panera, I’m
pleased that we’ve been able to deliver for our shareholders. Since we went public in 1991, the stock is up more than
1,600% (from June 10, 1991 to March 30, 2010 on a split adjusted basis). As well, I am pleased we have a new CEO
in Bill Moreton who brings to the job both continuity and new perspectives. And I am gratified Bill has a
management team in place that is strong and capable of delivering on the promise of the Panera concept. Most
importantly, though, I am pleased that, based on that strategy and the management team in place, we can look to the
future as confidently as we do.
I want to take this opportunity to thank all of you who have believed in our company and my vision over the
years. Your support, combined with the wise counsel of our Board, the commitment of our Support Center teams,
the skills of our operators and our franchisees and the loyalty of our customers really has been central to our success.
Know that we will do all in our power to fulfill the potential of the Panera brand and deliver for all of our
stakeholders in 2010 and beyond.
All my best,
Ronald M. Shaich
Chairman and Chief Executive Officer