This Popular Fast Casual Will Lay Off 5% of Its Workforce Due To Slowing Sales
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.
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.
![sweetgreen](https://www.eatthis.com/wp-content/uploads/sites/4/2022/06/sweetgreen.jpg?quality=82&strip=all&w=640)
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.