Panera Bread is entering the so-called value wars with its new “Mix & Match” deals in a bid to win back price-conscious diners.

The chain, known for its soups, salads and sandwiches, is in the early stages of a turnaround, with a focus on reinvesting in its business and reversing years of traffic declines. Once the top fast-casual brand in the U.S., Panera has fallen to No. 3, ceding the top spots to Chipotle Mexican Grill and Panda Express.

In 2024, Panera’s sales dropped 5% to $6.1 billion, according to Technomic estimates.

A key part of Panera’s comeback strategy is focusing on value.

Across the restaurant industry, executives have reported weaker spending among consumers, who are trying to save money by trading down to fast food or dining out less frequently. Chains like McDonald’s and Taco Bell have leaned into value offerings to try to win back customers.

About 3 out of every 4 diners said that daily specials, discounts or value promotions matter when choosing where to dine or order takeout, according to the National Restaurant Association’s annual State of the Restaurant Industry report.

“[Consumers] are seeking value, and they’re also seeking quality,” Panera CEO Paul Carbone told CNBC. “That’s so, so important.”

Starting Wednesday, Panera customers can choose halved portions of sandwiches and salads, as well as cups of soup, from the Mix & Match menu. Each of the 10 items is priced at $4.99, and diners have to buy at least two items. Seasonal menu items will also rotate through the Mix & Match options.

Each order also comes with the choice of a baguette, chips or an apple.

Panera explored other value offerings, but the Mix & Match menu tested successfully, Carbone said.

“The guest has really, really reacted well to it,” he said, adding the menu is expected to drive incremental visits to the restaurant.

And while Panera is introducing the deal, its popular “You Pick Two” offering is sticking around.

Carbone said that customer research showed that diners view the option to buy two entrees from the menu as an opportunity for variety, rather than a chance to save money. Like Mix & Match, the offer allows customers to choose a half salad, half sandwich or cup of soup or mac and cheese. However, You Pick Two spans the menu, rather than being restricted to just 10 items.

When Panera Bread began shrinking its sandwiches and skimping on salads, it started shedding customers.

Now, to win them back, the chain plans to reinvest in the business and undo many of those same cost-cutting measures, it said Tuesday.

Once the number one fast-casual brand in the U.S., Panera has dipped to number three, ceding the top spots to Chipotle Mexican Grill and Panda Express. Last year, its sales fell 5% to $6.1 billion, according to Technomic estimates. For years, the chain’s traffic has been shrinking, according to CEO Paul Carbone, who took the reins earlier this year. Controversy after the chain’s foray into energy drinks didn’t help matters, either.

Panera’s troubles have coincided with a tough year for fast-casual restaurants. Chipotle, Sweetgreen and Cava have all cut their full-year forecasts as they see younger consumers eating out less frequently.

Carbone has a plan to bring back customers. Under the strategy, named “Panera RISE,” the company aims to refresh its menu, focus on value, improve its service and build new restaurants. He said the plan has the backing of the franchisees who operate roughly half of its 2,200 U.S. locations, along with the support of JAB Holding, the investment arm of the Reimann family that owns the company.

Panera’s slide has been poorly timed for JAB. The firm has been plotting an IPO for the chain’s parent company Panera Brands, which also owns Caribou Coffee and Einstein Bros. Bagels.

In 2021, four years after taking the chain private, JAB struck a deal with Danny Meyer’s special purpose acquisition company for a merger that would take the company public again. But Panera scrapped those plans a year later, citing market conditions. In late 2023, the company confidentially filed for an initial public offering that still hasn’t happened.

When asked about the status of Panera’s IPO plans, Carbone told CNBC that the chain’s management team is currently focused on growing traffic and implementing the Panera RISE strategy.