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 No. 1 fast-casual brand in the U.S., Panera has dipped to No. 3, 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

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