Now that Panera Bread Co. has become a familiar sight in the suburbs, it's moving into the big cities.

The Sunset Hills-based company, which operates locally as St. Louis Bread Co., reached a milestone in that evolution this week when it opened the doors to its first bakery-cafe in Manhattan.

At 7th Avenue and 29th Street, the 102-seat restaurant is about the same size as Panera's suburban stores. And it will be followed by three more locations slated to also open in New York later this year.

"I think it's a logical next step for these guys," Phillip Juhan, an analyst with BMO Capital Markets, said of Panera's growth in urban areas. "It is a measured approach. This isn't something that is game changing for them, but it adds incremental layers of growth."

Company officials say there are no plans now for Panera to become as ubiquitous as Starbucks in major cities. But the urban locations, which are expected to make up about 5 to 10 percent of new stores this year, will be one part of the company's strategy.

Panera has been on a rapid growth spurt in recent years, opening 112 new locations last year. This year it is taking that up a notch with a target of opening 115 to 120 new bakery-cafes.

"We're at 1,500 locations now," said Scott Davis, a Panera vice president and chief concept officer. "As you get larger, you really have to start looking at more creative ways to build the brand out."

The company has had positive results with stores it has opened in Boston, Chicago, Los Angeles and San Francisco in the past few years, he said. Panera's first urban location, he added, was the one at 6th and Pine in downtown St. Louis. That store opened in 2003.

While these urban locations often have higher rents and operating costs, that is usually offset by a higher volume of traffic and sales, he said.

Aside from some tweaks to decor and style, and perhaps an extra cash register or two, these urban stores for the most part look and feel the same as a suburban location, he said.

"We've chosen not to go for a scaled-down version," he said. "We believe in holding true to the 'chill-out factor.'"

Bart Glenn, an analyst with D.A. Davidson & Co., noted that Panera is being careful to place its urban stores in locations that don't just draw a 9-to-5 lunch crowd, but that also have nearby residents so they can draw customers seven days a week.

"I think it makes sense," he said of the city locations. "I think it is a market that can be meaningful over time. ... You want to make the brand more accessible to more people."

As for New York City, Panera had been eying that market for at least five years, Davis said.

"It can be pretty intimidating when you look at it from the outside," he said. "But what you really learn about Manhattan is that outside of the financial district and Times Square, it's really made up of a series of neighborhoods."

In some ways, Panera's Manhattan store can be seen as the company's return to the Big Apple. The company, which once also ran Au Bon Pain, operated 40 to 50 locations under that banner in Manhattan more than a decade ago.

But the Au Bon Pain part of the business struggled amid a proliferation of competition with Starbucks and bagel shops. So the company sold off that part of the business in 1999.

Panera's Davis said the company is now better positioned for success in Manhattan and other urban markets under the banner of Panera and a strategy that does not focus on the financial districts as Au Bon Pain did in the past.

"We think the concept is much stronger as a whole - not just on the food, but the whole experience," he said. "We're a lot smarter and more experienced than we were 25 years ago."

On top of that, analysts note that the company has been ramping up its advertising budget recently, which should help it as it expands.

In an conference call with investors earlier this week, William Moreton, Panera's chief executive, said the company would run its first national cable commercials later this quarter.

Panera is also continuing to expand in other ways. It's accelerating its pace to add more drive-thrus and is adding table service to more of its stores.

"International expansion is on the horizon for them at some point," Juhan added. "But not this quarter."