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From: www.canada.com/nationalpo...00bf04754f
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U.S. bread chain eyes Canada
Peter Koven, Financial Post
Published: Saturday, May 06, 2006
The popular U.S. restaurant chain Panera Bread Co. has unveiled plans to enter the Canadian market in 2007, adding another competitor to an already crowded sector.
Panera is a quick-serve chain of so-called "bakery-cafes" based in Richmond Heights, Mo. For people sick of burgers and fries, the company offers premium sandwiches like asiago roast beef or portobello & mozzarella. It also offers a variety of soups, salads and sweets.
Panera is remaining close-mouthed about its Canadian expansion plans, only saying the first restaurant will be open next year. The company will not reveal what markets it plans to enter, or how many restaurants it eventually hopes to open.
"One of the things we've found in the last five to 10 years is this concept translates well regardless of geographic boundaries," said spokesman Mark Crowley. "This is something people are responding well to. It has led us to believe there could be an opportunity in an international market like Canada."
Panera owns and operates almost 900 stores in 36 U.S. states, more than 500 of which are franchised. It is planning to open another 150 to 160 this year. The stores tend to be located in suburban areas, but the company does have a growing urban presence as well.
But it's coming to a market that's already rife with competition. According to analyst Robert Silgardo at Dundee Securities Corp., the barriers to entry in Canada aren't especially strong, but being successful is another matter.
"Your average sandwich is already costing $8. To come in and charge $10, it would be hard to do, especially with gas costing $1 a litre," he said.
While Panera has positioned itself as a higher-end and healthier fast-food option, Mr. Silgardo said it's still going to face tough competition from the likes of McDonald's, Tim Hortons, Subway and Quizno's. Quizno's also marketed itself as a more premium brand when it entered Canada, but recently cut its prices.
"They're all trying to compete for that lunch dollar. McDonald's has their special deals, Wendy's has salads. If they're trying to be more premium than Quizno's, it would be tough. It depends how good they are at marketing," he said.
Location could be a problem as well. According to Mr. Silgardo, it is becoming increasingly hard to find good locations in Ontario. He said Panera might have an easier time in Alberta, where there is no provincial sales tax and more wealth.
________________
U.S. bread chain eyes Canada
Peter Koven, Financial Post
Published: Saturday, May 06, 2006
The popular U.S. restaurant chain Panera Bread Co. has unveiled plans to enter the Canadian market in 2007, adding another competitor to an already crowded sector.
Panera is a quick-serve chain of so-called "bakery-cafes" based in Richmond Heights, Mo. For people sick of burgers and fries, the company offers premium sandwiches like asiago roast beef or portobello & mozzarella. It also offers a variety of soups, salads and sweets.
Panera is remaining close-mouthed about its Canadian expansion plans, only saying the first restaurant will be open next year. The company will not reveal what markets it plans to enter, or how many restaurants it eventually hopes to open.
"One of the things we've found in the last five to 10 years is this concept translates well regardless of geographic boundaries," said spokesman Mark Crowley. "This is something people are responding well to. It has led us to believe there could be an opportunity in an international market like Canada."
Panera owns and operates almost 900 stores in 36 U.S. states, more than 500 of which are franchised. It is planning to open another 150 to 160 this year. The stores tend to be located in suburban areas, but the company does have a growing urban presence as well.
But it's coming to a market that's already rife with competition. According to analyst Robert Silgardo at Dundee Securities Corp., the barriers to entry in Canada aren't especially strong, but being successful is another matter.
"Your average sandwich is already costing $8. To come in and charge $10, it would be hard to do, especially with gas costing $1 a litre," he said.
While Panera has positioned itself as a higher-end and healthier fast-food option, Mr. Silgardo said it's still going to face tough competition from the likes of McDonald's, Tim Hortons, Subway and Quizno's. Quizno's also marketed itself as a more premium brand when it entered Canada, but recently cut its prices.
"They're all trying to compete for that lunch dollar. McDonald's has their special deals, Wendy's has salads. If they're trying to be more premium than Quizno's, it would be tough. It depends how good they are at marketing," he said.
Location could be a problem as well. According to Mr. Silgardo, it is becoming increasingly hard to find good locations in Ontario. He said Panera might have an easier time in Alberta, where there is no provincial sales tax and more wealth.