Upscale Sandwiches Boom with Boomers

With health-conscious baby boomers aging, the fast-food industry has been shifting from 99-cent hamburgers to $5 upscale sandwiches to cater to the new demographic.

Stock in Panera Bread Co. almost tripled last year, from $20.63 to $56 per share on Feb. 18. Based in St. Louis, Panera had sales of $529.4 million for 2001, up 50 percent from the previous year, and the company is expected to report about an 80 percent increase in net income for 2001.

Panera, which has a store in Fayetteville, said average sales per store were $1.75 million in 2001, compared with $1.6 million for McDonald’s. The Fayetteville Panera had $1.17 million in sales for 2001, according to city tax records.

Panera has been following the lead of Seattle-based Starbucks, which pioneered the idea of “gourmet coffee” and now has about 4,100 coffee shops in North America, according to a recent story in The Wall Street Journal.

“Though overall fast-food sales growth has been waning for years, growing numbers of American consumers have proved willing to pay as much for a sandwich as for the $4 cappuccino to go with it,” the WSJ article state. “That’s big news in an industry long accustomed to promoting 99-cent hamburgers or chicken nuggets. And it is making even some fast-food veterans rethink their marketing strategies.”

McDonald’s and Arby’s Inc. are following the trend. Arby’s, famous for its roast beef sandwiches, has added a line of “fresh” sandwiches, and McDonald’s has purchased 33 percent of Pret A Manger, a British chain that sells prepackaged gourmet sandwiches.

In the United States, sales of custom-made sandwiches are rising 15 percent a year, much faster than the 3 percent growth rate for hamburgers and steaks.