Same-store sales growth
Same-store sales growth (or SSSG), expressed as a percentage, is a measure of the rise in revenue from a company’s existing restaurants over a certain period of time. SSSG is driven by ticket size and traffic.
Panera Bread (PNRA) posted systemwide SSSG of 0.7%, with company-operated restaurants posting SSSG of 3%, and franchised restaurants’ SSSG falling 1.4%. In company-operated restaurants, higher prices and product mix contributed 1.8% and 1.9%, respectively, towards 4Q16 SSSG. Meanwhile, lower traffic impacted 4Q16 SSSG by 0.7%.
Restaurants implementing Panera 2.0, which comprise nearly 70% of company-owned restaurants and nearly 10.5% of franchised restaurants, continued to outperform Panera 1.0 restaurants in SSSG. The company’s SSSG was also driven by the expansion of delivery services to 15% of its restaurants, enhancement of customer experience, improvement of food quality by removing all artificial ingredients and preservatives, and higher MyPanera program membership. Currently, nearly 51% of the company’s transactions are by MyPanera program members.
As for menu innovations, the Chipotle Chicken Avocado Melt, introduced in September 2016, has been one of Panera’s best-selling sandwiches. It contributed to the company’s 4Q16 SSSG. In comparison, in 4Q16, peer Chipotle Mexican Grill (CMG) posted SSSG of -4.8%.
You can gain exposure to Panera by investing in the iShares Russell Mid-Cap Growth ETF (IWP), which has invested 0.18% of its holdings in Panera. IWP has also invested 0.4%, 0.32%, and 0.3% in Chipotle Mexican Grill (CMG), Domino’s Pizza (DPZ), and Darden Restaurants (DRI), respectively. Next, we’ll look at another unit driver for Panera, unit growth.