Panera Bread’s (PNRA) early move to cash in on the growing trend of consumers preferring to order food on their smartphones is paying off nicely. The soup and sandwich chain expects to pass $1 billion in annualized digital sales this year, representing an important milestone and key source of growth in an industry that is generally struggling to attract new customers.

In a statement, Panera confirmed that it receives an estimated 1.2 million digital orders per week, indicating that its digital platforms account for about 26 percent of total sales. As a result, the company claims it now generates the highest rate of digital sales in the restaurant industry, excluding pizza chains.

Management is confident that digital sales will continue to grow, predicting that they might even make up half of total revenues between 2019 and 2021. (See also: Panera Bread Boosts Delivery, Digital Sales in Q4.)

"We had always assumed digital will be a third of our business. I'm confident it will be," Panera’s president Blaine Hurst said to USA Today. "The question is how high will it be for Panera? The pizza guys are in the 40s. I could see Panera at 50 percent."

Trendsetter

Panera first started experimenting with digital ordering in 2014 when it launched Rapid Pickup, a program that enables customers to place an order online and then pick it up at a designated local store. The company has since invested heavily in this successful venture, including adding a large number of delivery drivers to its payroll so that customers can also get their orders delivered directly to their home address.

Panera’s success hasn’t gone unnoticed by its restaurant chain peers, many of which have since launched their own digital ordering platforms. First quarter digital orders at Chipotle (CMG) now account for 8 percent of its $1.07 billion sales, representing a 53 percent increase on the prior year. (See also: Chipotle Digital Order Wait Time Cut in Half.)

Elsewhere, coffee chain Starbucks (SBUX), which restricts access of its mobile service offerings to members of its loyalty program, recently reported that digital transactions account for 29 percent of its overall sales. Dunkin Donuts (DNKN), which offers a similar service, claims that its On-the-Go mobile app generated close to 2 percent of total company sales during the first quarter of 2017.

 

 

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