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UBS: The delivery revolution is going to be great for Panera Bread

Greg Hoffman   

UBS: The delivery revolution is going to be great for Panera Bread
Stock Market2 min read
Panera Bread is best positioned to benefit from the delivery revolution, according to UBS analyst Dennis Geiger.

In a note to clients sent out on Monday, Geiger wrote, "Panera's investments in its internal delivery model position the brand as an early leader, while its menu (i.e. sandwiches, soups, salads) travels well and is in demand based on our survey work."

A UBS survey found that sandwiches are the third most likely cuisine that respondents ordered for delivery, behind only pizza and Chinese food.

Panera

UBS

That's not the only reason why Panera is the way to play delivery, UBS says. 76% of consumers surveyed prefer to order directly from the restaurant from which they are ordering rather than from a third party like GrubHub.

That's great news for Panera who has invested a lot of time and money into building their own online delivery platform. The effort has payed off, resulting in 10% same store sales growth for stores with delivery. UBS predicts that by the end of 2017, 35%-40% of Panera locations will have delivery, driving up sales across the company.

Delivery offers an opportunity for revenue growth for restaurants because ticket prices are higher on average than takeout. According to UBS, citing delivery solutions firm Olo, the average delivery order has a check two and a half times the size of the average in-store ticket.

Separately, Panera Bread's stock is soaring on Monday, up 9.28% at $286.17 a share on reports that the company's management is discussing selling the company.

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