Sweetgreen (SG) is pinning its uncertain future on under $15 wraps, designed to address consumer complaints that its salad and grain bowls are too expensive.
For the first time this week, Sweetgreen began selling four wraps. “You know, the classic chicken caesar wrap in most [locations] starts at $10.45 … and no wrap in any market is above $15,” Sweetgreen co-founder and CEO Jonathan Neman told analysts on a late Thursday earnings call
He added, “I think both from a quality, craveability, and price value, we are really delivering, and customers are noticing it.” Over $10 for a wrap isn’t exactly a screaming hot deal, even if it features “roasted chicken, parmesan crisps, shaved parmesan, garlic breadcrumbs, chopped romaine, caesar dressing and a hint of lemon juice.” But then again, Sweetgreen mostly operates in expensive cities where higher-income office workers order meals to-go. The wraps have to be embraced by eaters beyond just lunch hours, however. Sweetgreen’s performance has been absolutely dreadful as consumers say no to $20-plus bowls from its tech-forward kitchens.
The company’s first quarter same-store sales crashed 12.8%, worse than the 11.5% plunge in the fourth quarter of last year. For perspective, Burger King US (QSR) tossed up a 5.8% same-store sales increase in the first quarter. Chipotle (CMG) clocked in with a 0.5% gain.