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New technology answer to Panera's problems: Analyst

Panera Bread is turning to technology to help improve customer service, but said the addition of kiosks and a smartphone app to place orders will not mean job cuts. It's a move that analyst Stephen Anderson said is a big part of the answer to Panera's problems.

The restaurant chain is just off two-year lows and has seen traffic slowing since 2012.

"A big part of the reason why sales have not grown as strongly is because they do have that crunch at lunch and to a smaller extent at dinner," Anderson, senior restaurant analyst with Miller, Tabak & Co., told CNBC's "Street Signs."

"It's a victim really of its own success. What Panera 2.0 tries to address is getting more customers in through the door and online rather than having those customers go away."

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Scott Eelis | Bloomberg | Getty Images

Customers can either order from a kiosk located inside the restaurant, or from an app on their smartphone. The new service is currently being tested at select locations, and Panera said more than a third of orders are now placed digitally.

Panera CEO Ronald Shaich, who has called the long lines a "mosh pit," insists the move will not mean job cuts. Instead, servers will be added to deliver food to tables.

"What we did is that we took that labor savings that comes from the digital input if you will, and we redeployed that in a place that actually makes a difference for you as a guest," Shaich said.

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Panera is Anderson's favorite restaurant stock for 2014. He currently has a "buy" rating on the stock, with a $205 price target.

He wouldn't be surprised that if over time the company will have "a net savings not only on the labor line but also on the food cost lines such as that tech will enable reduction in food waste."

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—By CNBC's Michelle Fox, with reporting by CNBC's Morgan Brennan.

Disclosure: Stephen Anderson and his firm, Miller Tabak & Co., do not own shares of Panera.

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