Sweetgreen Will Lay Off 5% of Workforce — Eat This Not That
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The trend toward hybrid or fully remote work has impacted restaurants in urban areas that relied on office workers as their main customers. Fast-casual chains that have reigned supreme in city centers are now among those seeing lower sales as a result. Sweetgreen, a favorite lunchtime destination, just announced it will be laying off a chunk of its employees because of slower sales.

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The Los Angeles-based chain said its “erratic urban recovery” after the pandemic resulted in a sales growth lag. Consequently, the company will be laying off 5% of its workforce in order to get back to profitability.

Summertime is usually Sweetgreen’s best season, but instead, the chain didn’t notice a lift in sales during the season. The company said it was first made aware of the sales slump around Memorial Day, which prompted it to lower its expectations.

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As part of its new plan, Sweetgreen said it will also be relocating its support center to a smaller space. The company now expects its same-store sales to land between 13% and 19% this year, which is still lower than the expected 26%.

Even before the pandemic, the fast-casual was transitioning out of the city and into suburban neighborhoods. It still has a heavy footprint in those regions but is working on moving away from high-density areas.

“At the end of 2019, our footprint was 65% urban, 35% suburban,” CFO Mitch Reback said on an earnings call Tuesday. “Today it’s 50/50. At the end of 2019, our urban restaurants had an AUV (average sales) of $3.1 million and our suburban restaurants had an AUV of $2.7 million. At the end of the second quarter of 2022, AUVs flipped (and) urban SUVs are now $2.7 million and suburban EVs are $3.1 million.”

Sweetgreen operates more than 160 locations in 13 states across the country.

Amber Lake

Amber Lake is a staff writer at Eat This, Not That! and has a degree in journalism from UNF in Jacksonville, Florida. Read more

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