After a fairly successful start in Clayton, Panera's experimental nonprofit cafe model has hit a bit of a stumbling block in Portland, Ore.
Apparently, not enough people are paying for their meals at the pay-what-you-want cafe that opened in that city earlier this year, according to a recent story in the Portland Tribune. The cafe is losing money.
So the cafe recently took the somewhat unusual step of hiring a former corrections deputy to be a "community outreach associate." His job, according to the newspaper, is to "gently convince those come in too frequently for free meals or who stay too long that they aren't grasping the concept of the community cafe."
The Clayton cafe has "greeters" who also gently, but firmly, explain the cafe's concept to newcomers and to dissuade freeloaders from taking too many freebies if they can afford to pay. But employees also realize that it's sometimes hard to tell who has need and who doesn't, so they try not to be too pushy.
One of the problems, Panera officials say, is that the Portland cafe has become a bit too much of a hangout for the homeless, some of whom "camp out" all day with their bags. You would think that that's who these cafes are there to serve. But apparently there aren't enough paying customers to help offset them.
And, officials said in the story, some of the disadvantaged folks have obvious mental health and addiction issues, which make the cafe less appealing to paying customers.
"We had to help them understand that this is a cafe of shared responsibility and not a handout," Ron Shaich, Panera's chairman and the mastermind behind the nonprofit cafes, told the Portland Tribune. "It can't serve as a shelter and we can't have community organizations sending everybody down."
The Portland cafe, which opened in January, is the third and most recent "Panera Cares" cafe to open. The first two, which opened last year first in Clayton and then in Dearborn, Mich., have been taking in about 80 percent of the retail price of meals. But the Portland cafe has only been bringing in about 60 percent, the story said.
The Clayton cafe celebrated its one year anniversary in May. Shaich told me then that the cafe was bringing in about a couple thousand dollars a month -- some of which was being fueled into a job training program for young people from Covenant House, a shelter that serves homeless and at-risk kids.
In the begining, the Clayton cafe had some rough patches dealing with freeloaders, too. It still does -- but not as much as before.
Kavita Kumar covers retail and consumer affairs for the Post-Dispatch. She blogs on Consumer Central. On Twitter, follow her @kavitakumar and the Business section @postdispatchbiz.

