Name: Why Americans Are Turning Away From Sweetgreen
Uploaded: 2026-01-06T08:49:13.000Z
Duration: 7 min 47 s
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Salad chain Sweetgreen revolutionized the fast food industry when it launched in 2007, proving healthy food could be convenient and accessible.

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That's why it was so exciting to the consumer.

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There was actually a restaurant concept that offered these type of items on their menu in 2025.

It's still a lunch favorite among office workers in big cities.

The company has been struggling ever since going public in 2021.

It has never been profitable, reporting a $90 million net loss in its full year 2024 earnings.

Its stock trades around $5.55 after falling more than 80% since the beginning of 2025.

And same store sales, a critical metric for measuring store performance, declined for a second quarter in a row in Q3 2025 results.

It's been a tough 2025 and restaurant land just broadly.

It's up to them to turn the ship around and and get those same store sales into a place where investors start to pay attention again.

Inflation and now tariffs are further hurting the chain.

Competition has taken away some of its premium offering.

As investors turn away, growing impatient for a turnaround, can the chain do anything to win them back?

Sweetgreen was founded in Washington, D.C. by three Georgetown University students.

The young entrepreneurs turned the brand into a national phenomenon.

The company's initial funding of $300,000 came from friends, family and venture capital funds, helping the company expand beyond Washington, D.C.

Sweetgreen was an early innovator in mobile ordering.

They really had to focus on fishing where the fish were and getting as many people through those key lunch periods as possible.

And it, I think, became very apparent early on that if they could get consumers to order ahead of time and do mobile pickup, then they could end up, you know, servicing more during the lunch day part.

When the pandemic hit, sweetgreen was able to rely on its preexisting strengths, giving it an edge over competitors.

Digital orders, which were already half of the business, increased by 17%.

It also bet on automation, acquiring restaurant company Spice and its technology for $70 million.

When it couldn't depend on lunch sales in urban areas, the company accelerated plans to expand in the suburbs.

By the time it filed an IPO in November, 2021 had grown to 140 restaurants across 13 states and Washington, D.C.

We like to say we want to build the McDonald's of our generation, so eventually we want it to be everywhere.

That first day, Sweetgreen's share price jumped 76%.

Sweetgreen's performance post IPO has been rocky.

Its stock has consistently traded below its initial offering price and the chain has yet to become profitable.

Both the company and Wall street misjudged key risks, including post pandemic hyperinflation and the slow recovery of office occupancy.

Its expansion in some suburbs was challenged as some stores were built ahead of brand awareness.

It did cause concern on Wall street that perhaps they were facing a geographic portability issue, which is is when you saw the stock really crash.

Then ironically, you know, 18 months later, those were some of their fastest growing locations.

So it ended up not being a geographic transferability issue.

Though it missed several quarters of earnings estimates, the company kept opening new locations and trying to improve operations.

Shares started to climb back in 2024 after adding more automation to stores.

Yet the stock has since snowballed after nearing a $50 high that November in its Q3 2025, Sweetgreen missed earnings and revenue expectations.

Its same store sales slipped for the second time and traffic dropped 11.7%.

Its profitability problem worsened, reporting another decline in net losses.

The company also announced it had sold Spice, which developed its automated kitchen technology, in an effort to reinvest in key priorities and sharpen its focus on growth and profitability.

However, the sale involved a supply and licensing agreement that will allow Sweetgreen to deploy the technology across its restaurants.

In the prior quarter, Sweetgreen laid off 10% of its workforce.

First of all, your service isn't up to par, meaning your interaction with customers is following.

Your food costs are high compared to what your established metrics are.

Labor costs are probably through the roof, meaning really at the end of the day you're not performing based on where you want your average unit volumes to be.

Sweetgreen is also facing industry wide challenges.

Restaurant menu prices have outpaced inflation and even higher income.

In a bid to bring customers back, Sweetgreen said it increased its portion sizes on chicken and tofu by 25% in July.

Yet its salads remain pricey, ranging from $14 to upwards of $25.

In big cities, its core customer base skews younger.

Many are facing high unemployment rates and a tough job market.

You're probably not going to your fast casual concepts quite as much.

I Think that also makes all of those consumers more value conscious.

They become much more focused on did they get enough chicken in their bowl?

Sweetgreen declined CNBC's request for an interview or comment.

Investors haven't fully abandoned Sweetgreen yet.

The company has been growing its revenue and narrowing its losses.

Experts say its profitability issue doesn't come from its stores, which are making money.

The chain is aiming to grow from about 260 locations to 1,000 by 2030.

In contrast, Kava has more than 400 stores and Chipotle has more than 3,700.

The way that you ultimately become profitable on the bottom line is growth.

I mean, you have to grow the unit base so that you can leverage that sunk g and a cost across a greater number of locations.

But while scaling is expensive, Sweetgreen has no debt and some cash.

It received $100 million in cash and $86.4 million in Wonderstock, which is the food and restaurant company that bought Spice.

Ultimately, if you're talking about the next five or 10 years, that's really a game changer in terms of operations consistency and margins.

And with better margins from the infinite kitchens, there's always that question of do you harvest that margin or do you weaponize that margin?

And if you choose to weaponize it, how does that change the competitive mode around your business?

That's really one of the big long term dynamics with sweetgreen that investors just don't care about right now because they want to see line of sight to a better same store sales number.

Whether investors can hold out that long is another story.

Sweetgreen aimed to be profitable by 2024.

Inflation remains high and the company could be further impacted by tariffs.

There is more competition from other bull or salad concepts.

Some believe the company should rethink its growth strategy.

They've got to turn around that overall corporate problem number to make investors look like this is a viable concept.

Perhaps there needs to be a little bit of a slowdown, pull back on the expansion on units and let's look at fixing what we currently have.

And that's usually, I think, the most prudent path.