Sweetgreen is betting on fries and Michelin-starred chefs to keep customers coming back
Sweetgreen wants to freshen up its menu to create excitement and loyalty among its diners.
On Wednesday, Sweetgreen reported its 2024 fourth-quarter and fiscal-year earnings. Sweetgreen’s revenue for the fourth quarter was $160.9 million, representing a 5% increase. But, the company said it expects same-store sales to grow by just 1-3% in 2025; analysts previously anticipated 4%, on average. In turn, Sweetgreen is turning to more add-ons, limited-time items and seasonal bowls to woo more customers and convince them that Sweetgreen is worth regularly spending their hard-earned dollars on. For example, last year, Sweetgreen started testing air-fried, seed oil-free fries that it will start rolling out to all of its locations in March. Caramelized garlic steak and air-fried brussel sprouts were also hits last year, Sweetgreen CEO Jonathan Neman told analysts during the earnings call.
Sweetgreen is not alone in facing operations challenges. The past year has been difficult for many fast-casual and quick-service restaurants. The rising costs of ingredients and labor, along with customers’ tight wallets, have slowed down these chains. This week, Mediterranean fast-casual chain Cava released a full-year sales forecast that fell below analysts’ expectations; Cava executives said that while their customer base is resilient, they are also increasingly being value-minded. Some chains have taken this opportunity to position their dishes as high-quality ones that can offer customers a better bang for their buck than fast food.
Sweetgreen is known for emphasizing fresh, locally sourced ingredients for its salads and bowls. “That’s something our consumers really value, and [it] resonates,” Neman said during the earnings call. But what Sweetgreen has found is that it needs to keep giving customers new reasons to come back. “In 2025, we are significantly increasing the pace of innovation across multiple areas of the business to create a steady drumbeat of newness to increase frequency, broaden our customer base and deepen brand loyalty,” Neman added.
The company also teased more limited-edition and seasonal items for the rest of the year, including a collaboration with a Michelin-starred chef.
Overall, Neman told analysts, “We feel very good about our price value,” given the fresh ingredients and orders being made from scratch. But, he added, “We do see some opportunities to continue to improve there.” One of these new opportunities will be with a revamped loyalty program — the company decided to sunset its previous Sweetpass+ rewards membership in April. Another opportunity is the introduction of more menu items in lower price ranges, particularly in the restaurant’s rotating menus. “You’ll see us, with the seasonal menu, start to bring in some items in more mid-tier price ranges, which we think will offer some value to our customers.”
Sweetgreen encountered other challenges during the fourth quarter, like wildfires in Los Angeles — the market represents nearly 15% of Sweetgreen’s revenue — and extreme cold weather across the country. It was, however, able to boost its profit margin, as its restaurant-level profit margin hit 17% in the fourth quarter due to the impact of menu price increases and continued labor optimization.
In addition to growing the frequency of customer visits, Sweetgreen laid out other priorities for 2025 on the earnings call. They included growing its overall customer base; expanding its footprint in markets like the Midwest, Texas and the Southeast; and optimizing operations.
Brad Jashinsky, director analyst at Gartner, told Modern Retail that with so much competition in the fast casual space, newness is key to differentiating a menu and keeping diners excited.
“Like many chains, Sweetgreen is seeing a slowdown in traffic,” Jashinsky said. “How do we get back those customers that were coming in to spend $15 on a salad?” Adding a relatively low-lift side dish like fries at a lower price is a great way to get the average ticket order up, he said.
That’s in line with how Neman is thinking about these additions. “The combination of these new menu items— thinking about price and how we can continue to deliver on price — combined with loyalty will continue to make us competitive in this space,” he told analysts.