Sweetgreen CEO strengthens protein portions because US companies require more than $ 16 of Downy office salads

The Sweetgreen recovery strategy includes 25% larger portions of chicken and tofu, upgrades of recipes for proteins such as chicken and salmon, and member offers on salads as cheap as $ 13. The decision follows months of disappointing sales: comparable store sales dropped up to 7.6% this summer, with a 10.1% dive in customer traffic. Sweetgreen has also reduced its annual prospects for the second consecutive quarter when it has trouble maintaining the guests under the budget interested in salads on average $ 16 per bowl.

Sales with comparable stores should now decrease by 4% to 6% for 2025, a striking reversal of previous hopes of flat performance. It was a second deadly quarter for the salad chain, and the investors responded by sending Sweetgreen shares plunging more than 25% at their lowest levels since 2023. The action has lost more than 70% of its value since January and is negotiated well below its price of public stock market of $ 28.

“So I think it is quite obvious that the consumer is not in an ideal place overall,” said Neman on Thursday when calling the company’s second quarter. Several factors have converged to force Sweetgreen’s hand. The biggest: work habits have changed permanently from the pandemic. The orders for corporate lunch, once the backbone of urban activities in Sweetgreen, collapsed while the occupation of the offices fluctuates and the hybrid hours persist. Affluy customers, long ready to pay for a long time for digitally ordered salads, now examine all expenses while clamp inflation and economic uncertainty persists.

Business districts, once the main locations of Sweetgreen are no longer filled with lunch regulars. Instead, urban outlets now depend on local traffic and dinner orders – which require more substantial dishes than a bowl of green vegetables. The own Sweetgreen consumers surveys reveal that customers want more protein – the gravitational center of a “meal” that seems to be worth its ticket price.

Slow growth and assembly losses

For the closed quarter on June 29, Sweetgreen said a total turnover of $ 185.6 million, barely up to $ 184.6 million per year – an increase of only 0.5% and well below Wall Street expectations of $ 191.73 million. Traffic has deteriorated strongly even as a menu price noted by Sweetgreen, the leaders citing a “more prudent consumption environment” and the opposite winds on the urban markets where the office lunch traffic remains low.

The profitable margin at the restaurant level fell to 18.9% of 22.5% per year before, pressed by higher food costs (especially new prices on packaging) and the increase in labor costs. The company posted a net loss of $ 23.2 million, widening from a loss of $ 14.5 million in the previous year and said an adjusted Ebitda of $ 6.4 million – almost half over $ 12.4 million last year.

Neman quoted the trail of the SG Rewards remained loyalty program, which caused less repeated visits; Only a third of Sweetgreen restaurants are currently meeting operational standards for speed and consistency. The company recently hired the former chipotle director, Jason Cochran, as a COO to solve problems ranging from speed portion on digital channels and in stores. Sweetgreen also closes two underperforming locations and records disability fees of $ 5.3 million.

Cautiously optimistic management, but confidence shaken

Despite rocky performance, Sweetgreen takes front with expansion, opening nine new restaurants (including four endless kitchens) in the second quarter, and plans at least 40 new openings this year – many with automation and lower labor requirements. Neman and the financial director Mitch Reback stressed that “the actions taken already show positive results”, highlighting a constant improvement in the frequency of the guests of the revamped loyalty program and the enthusiasm for seasonal menu elements.

However, the street remains skeptical. Sweetgreen stumbles have reinforced doubts as to whether premium salad chains can prosper in the current catering environment concerned for value, especially since the hybrid work saved, the crowd of tears and consumers are looking for more affordable options.

Retropping on new portions of protein has been rapid: customer satisfaction has improved 30% after the deployment of July of larger portions of chicken and tofu. In recent weeks, Sweetgreen has widened its repertoire with “protein plates” – portions of steak, chicken or tofu on grains, aimed at gaining dinner traffic and responding to customer demand for warmer offerings.

When Sweetgreen tested steak protein plates for the first time in Boston, the article represented almost 20% of dinner commands – a sign that more substantial meals can be a key to capturing lost income from office salads. “We have to meet people where they are. For us, these are healthier options that are always filling,” said Neman. The steak comes from regenerative farms nourished with grass to maintain the sustainability philosophy of Sweetgreen intact.

Even if Sweetgreen changes its menu, criticism and notes remain mixed. Some loyalists have groaned for months on leaning chicken portions. Reddit Threads catalog the question of whether the portions are becoming smaller for the $ 16 bowl, and company managers recognize that consistency remains a concern.

For this story, Fortune Used a generative AI to help an initial project. An editor checked the accuracy of the information before the publication.