Company economic forecasting methods and analysis

Company Economic Forecast: Panera Bread

Explain the business you are in. Explain your business and the different industries that would impact your operation.

One new eatery that is still in the process of expanding nation-wide as a franchise of note is that of Panera Bread. As an emerging business, it is an excellent business investment prospect, far from 'bottoming out' as older, more established coffee cup centered franchises such as Starbucks. Unlike Starbucks, Panera is also known for the quality of its sandwiches and pastries as well as for its coffees and other hot beverages. It is especially popular as a lunch and breakfast establishment for eating in or carrying out, rather than for after hours lingering. Its main clientele is often slightly older than Starbucks, that of office workers -- hence its proclamation, upon its website that one ought to impress the boss with an order from Panera. (Official Website, http://www.panerabread.com/default.aspx)

Panera is more upscale in its market pricing and positioning than, for example, another sandwich franchise Subway. But all industries impact the restaurant industry of course, not just competitors. The diet industry, diet fads, and the overall price of food all have an effect, as well as a supply of inexpensive labor, as students and minimum wage employees usually staff franchise counters. If food costs do not go down, such as the escalating price of milk the prospects for a mid-line food chain, like Panera which is neither cheap nor luxury in its marketing position could be dicey

Part II

Describe the current environment. Given the recent history of the economic environment, explain where your business currently stands and why.

At present, the outlook for the American economy is mixed. Unemployment is declining and new orders for merchandise are on the rise. Yet consumer expectations have failed to keep apace with these prosperous developments, which may partly explain ordinary American's reluctance to begin new houses or boost the stock market with greater revenue. The fact that unemployment is down is good for Panera, because eating out is one of the first things that people forgo in an uncertain job market. This is particularly true of lunch and breakfast, meals usually eaten with co-workers rather than with family. However, the fact that consumer confidence is low is a poor forecast for all but the least expensive eateries -- as even employed workers fearful of losing their job may brown-bag it with Wonder bread and instant coffee from a thermos, than heading to Panera. Only the highest-end consumers and eating venues are not impacted by such employment and consumer confidence data regarding their food consumption habits.

Part III

Provide an outlook for the economy in relation to your business. How will you adjust your operation to maximize profit or minimize the loss given your expectations of the economy?