Sweetgreen is betting on cheaper wraps and clearer pricing to draw diners back. The chain has increased portion sizes and made prices more transparent when customers build their own salad bowls.
Sweetgreen, Inc. (SG) launched four wraps priced under $15 at all of its locations in May, aiming to reverse the public perception that the brand is expensive. The publicly traded company added lower-priced wraps to its menu to shake off its costly image. Just as sales began to show signs of recovery, food safety scares involving lettuce and jalapeños hit consumer demand across the entire restaurant industry. Even so, Sweetgreen management still believes the menu changes can attract more customers into its stores. The chain rolled out four wraps under $15 at all locations in May, partly to improve its reputation for having a high spending threshold. These new items are also part of a broader turnaround plan that includes upgrading ingredient quality and speeding up service. After several quarters of double-digit declines in transaction volume, transactions stabilized in June and turned positive in early July, showing the initial pull of the new wraps.
Taco Bell and Chipotle both suffered food contamination safety incidents in succession. Sweetgreen rushed to clarify to consumers that its stores do not use iceberg lettuce, that its suppliers were not affected, and that it was tightening food safety procedures. But consumers still voted with their feet: the company's same-store sales fell 6.2% year over year in its latest quarter, with foot traffic down 2%. Management consequently lowered its full-year guidance. The company had previously projected a full-year same-store sales decline of 2% to 4%, but now expects a decline of 7% to 8%. Management hopes that as some food safety incidents subside, its value-focused offerings, especially the wraps, can drive store sales and traffic. Chief Financial Officer Jamie McConnell said: "Previously, when you walked into a Sweetgreen, there were far more items priced above $15 than below $15. So from a psychological standpoint, even though many of our items were actually cheaper than competitors, the lack of an entry-level low-price option made people see us as a very expensive store."
Sweetgreen has also increased portion sizes and improved pricing transparency for customers building their own salad bowls. McConnell said: "It used to often be like this: you'd pick a $10 base vegetable bowl, then keep adding toppings, and before you knew it, a salad became $22, and of course consumers would be annoyed. We need to make pricing crystal clear." Now customers can get a meal that includes one protein, two base vegetables, four toppings, plus dressing and bread for about $13. According to the CFO, the average total ticket per store, including add-ons like drinks and delivery, is about $20; the average price of main menu items is close to $15. The entry price for wraps is about $11, with an average price of around $13 after adding premium ingredients like avocado. Sweetgreen is gradually moving away from heavy discounting strategies. McConnell said past promotions like "buy one, get one free" and $10 member specials could attract traffic, but rarely converted discounted customers into regular full-price repeat buyers. The lower starting price point gives consumers room to choose: budget-conscious customers can keep their spending under $15, while those willing to spend more can add premium ingredients like salmon or steak. In an environment where inflation and high energy prices are squeezing consumers' wallets, driving store traffic is a higher priority for Sweetgreen than upselling high-margin items. Wolfe Research restaurant industry equity analyst Margaret-May Binshtok said the wraps can also attract customers who previously did not eat salads. Tracking social media sentiment, she found that about one-third of first-time customers who posted about their experience on social platforms in September ordered a wrap. Meanwhile, the share of complaints about excessive pricing on social media dropped from 4% to 5% in the first quarter of this year to around 1.5% in the third quarter. Binshtok said: "You can already see the growth momentum from the wraps." She also noted that improving consumers' perception of value for money is crucial to Sweetgreen's long-term same-store sales growth. Corporate finance daily news and in-depth insights are brought to you by the CFO Journal team.
Beyond pricing reform, Sweetgreen is also improving food quality. Its kitchen team is studying how to cook chicken to balance taste and output efficiency; lettuce and tomatoes are now cut fresh every morning rather than prepped the night before. The brand is also pulling out all the stops to speed up service. For example, suppliers now deliver kale with the stems already removed. However, the newly launched wraps initially slowed down service efficiency, as some employees could not roll them fast enough. McConnell said that now, during peak hours, popular stores assign a dedicated employee solely to making wraps. "Many customers were reluctant to come to Sweetgreen because they felt the service was too slow. Our goal is: walk in, get your salad, walk out, all within 5 minutes."
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