New York
Sweetgreen aims to attract financially strained office workers who have become disenchanted with its salads by introducing a new sandwich line.
Starting Wednesday, the chain will offer four types of chicken wraps, each priced below $15. This move is part of Sweetgreen’s strategy to boost sales and alter the perception that it has become too expensive.
This menu expansion comes at a crucial time, as Sweetgreen faces challenges, evidenced by its stock value plummeting 80% last year and a reported 11.5% decrease in same-store sales in its most recent quarter.
This decline is partly due to menu monotony; as Sweetgreen co-founder Nicolas Jammet noted, “even our most loyal customers aren’t opting for bowls or salads every single day.”
Younger diners have increasingly opted to pack their lunches or turn to fast food chains that offer substantial discounts, leading to a decline in demand for higher-priced lunch bowls.
By introducing wraps, Sweetgreen aims to cater to the preferences of its existing customers while also appealing to new ones. Jammet shared that pricing them below $15 was intended to make them feel more accessible and encourage repeat visits.
The company previously reported a 13% reduction in visits to its nearly 300 locations by the end of last year.
Sweetgreen is currently playing catch-up, as competitors like Chopt and Just Salad have been offering wraps for years. Cava, a rapidly expanding Mediterranean competitor, also features pita wraps and has recently increased its annual sales forecast.
Robert Byrne, the senior director of consumer research at Technomic, noted that the addition of wraps enables Sweetgreen to stay competitive in the fast-casual dining sector.
“Other fast-casual sandwich establishments already enjoy a strong reputation with customers regarding healthy options,” Byrne remarked.
Last year, Sweetgreen’s effort to broaden its menu faltered.
The introduction of ripple fries, marketed as a healthier alternative to a fast-food classic, lasted only five months before being discontinued. The need to air-fry the potatoes every 20 to 30 minutes hindered operational efficiency, as stated by the company.
Sweetgreen tested its wraps in approximately 70 locations across New York, Los Angeles, and the Midwest. According to Jammet, they determined the optimal slicing angle, ingredient ratios, and how to seamlessly integrate wraps into the kitchen’s workflow.
For instance, restaurants only needed minor modifications, such as adding tortilla presses to the beginning of the prep line and a designated wrapping area at the end.
“Our team members have performed probably hundreds of thousands of repetitions of wrapping to ensure they have it down,” Jammet mentioned during the testing phase.
The wraps will range in price from $11 to $15, depending on the city. This offering is part of Sweetgreen’s initiative to create lower-cost options, similar to their $10 specials, aimed at attracting budget-conscious diners.
According to a Placer.ai report, traffic to Sweetgreen has been rated “consistently negative” in recent months, with a 7.6% decrease in pedestrian traffic in March. In contrast, Cava’s traffic grew 6.8% during the same period.
The introduction of wraps “could be a valuable strategy to generate more traffic, given the success of competitive fast-casual restaurants like Jersey Mike’s and Cava,” noted Byrne from Technomic.
Sweetgreen is set to report its next earnings on Thursday, which will provide investors with insights into whether these new initiatives are effective.
