Sweetgreen lays off 10% of its support staff due to a steep drop in sales and foot traffic
Sweetgreen Faces Challenges but Pushes Forward with Strategic Changes
In Q2 2025, Sweetgreen, the popular salad chain, experienced a setback with a 7.6% decline in same-store sales, a widened net loss, and operational challenges. The company's CEO, Jonathan Neman, acknowledged the dissatisfaction with the results, attributing the setback to both internal issues and an unfavourable consumer environment.
Operational Changes
To tighten operations and reduce costs, Sweetgreen has trimmed approximately 10% of its support center headcount. The company is also focusing on improving restaurant-level profitability, which fell to 18.9%, while addressing the impact of tariffs and other cost pressures.
Sweetgreen continues to invest in AI-driven automation technology, specifically the "Infinite Kitchen" initiative, to enhance kitchen efficiency and scalability. The company is also committed to sustainability, with carbon-neutral aspirations integrated into its operational reforms.
Menu Adjustments
Despite positive customer reception, Sweetgreen discontinued the Ripple Fries product to simplify and streamline the menu. Menu price increases have been implemented, providing a modest 2.5% lift in revenue to partially offset declines from lower traffic and changed customer mix.
The company acknowledges that a tough comparison with last yearβs successful steak launch affected results, indicating a need to refresh or adjust menu offerings further to better align with current consumer preferences. In July, Sweetgreen increased the portion size on chicken and tofu by 25% to address a common complaint from protein-seeking consumers.
Enhancing Customer Experience
A revamped loyalty program, SG Rewards, is part of the strategic reforms intended to boost customer engagement and repeat business. Sweetgreen is addressing consumer shifting preferences in a competitive and value-prioritizing market through these enhancements.
Investments in digital platforms and new restaurant openings continue to be a key focus, aiming to improve customer access and experience despite recent disappointing demand trends.
Looking Ahead
Sweetgreen is projecting same-store sales to decline between 6% to 4% for the year, down from an earlier projection of sales being flat. Despite the challenges, the company remains optimistic, with at least 40 net new restaurants expected to open this year, half featuring the automated Infinite Kitchen make-lines.
The company is entering four new markets this year: Arkansas, Sacramento, Phoenix, and Cincinnati. Coming later this year, loyalty members will be able to scan and pay in one transaction, speeding service time.
Sweetgreen has hired Zipporah Allen as Chief Commercial Officer, previously holding positions at Taco Bell and Strava. Jason Cochran, the recently hired chief operating officer, has launched an initiative called Project One Best Way to raise operational standards across the restaurants.
The company is also scheduling eight seasonal promotions for next year, aiming to drive traffic improvements. Despite the setbacks, Sweetgreen is determined to regain momentum and continue to innovate in the competitive fast-casual dining industry.
[1] https://www.sweetgreen.com/news/sweetgreen-reports-second-quarter-2025-financial-results [2] https://www.bloomberg.com/news/articles/2025-08-04/sweetgreen-s-neman-says-chain-faces-tough-competition-in-fast-casual [5] https://www.restaurantbusinessonline.com/financing/sweetgreen-posts-q2-loss-as-sales-decline-amid-operations-challenges
- In response to the setback in Q2 2025, Sweetgreen aims to enhance the customer experience by implementing a revamped loyalty program, SG Rewards, and investing in digital platforms to improve access and service.
- As part of the strategic changes, Sweetgreen is set to expand to four new markets this year: Arkansas, Sacramento, Phoenix, and Cincinnati, and plans to introduce a feature for loyalty members to scan and pay in one transaction to speed up service time.
- Despite the operational challenges and a decline in same-store sales, the company remains optimistic, with 40 net new restaurants expected to open this year, half featuring the automated Infinite Kitchen make-lines.
- In an effort to address shifting consumer preferences and stay competitive in the fast-casual dining industry, Sweetgreen has hired Zipporah Allen as Chief Commercial Officer and launched the Project One Best Way initiative to improve operational standards across all restaurants.
