Urban eateries that relied on office employees as their primary patrons have been hurt by the trend toward hybrid or entirely remote work.
Consequently, certain fast-casual companies that previously dominated city centres are now reporting decreasing sales. Favorite lunchtime hangout Sweetgreen recently disclosed that it will be letting go of some of its staff due to poor sales.
The Los Angeles-based chain said that the "erratic urban recovery" following the epidemic was the cause of a slowdown in sales growth. Consequently, in order to return to profitability, the corporation will be firing 5% of its workers.
Sweetgreen's biggest season typically occurs in the summer, however this year the chain had no increase in sales. The corporation claimed that around Memorial Day, it first learned about the sales decline, leading it to reassess its goals.
Sweetgreen stated that as part of its new strategy, it will also move its support centre to a smaller location. The company's revised projection for same-store sales this year is between 13% and 19%, which is still below the predicted 26%.
Before the pandemic, fast-casual restaurants were moving from urban centres to suburban areas. Although it still has a large presence there, it is making an effort to leave high-density areas behind.
Our footprint at the end of 2019 was 65% urban and 35% suburban, according to CFO Mitch Reback, who spoke on a Tuesday earnings call. "It's 50/50 right now.
Our suburban restaurants had an AUV of $2.7 million and our urban restaurants had an AUV of $3.1 million at the end of 2019.
AUVs switched (and) urban SUVs are now $2.7 million and suburban EVs are $3.1 million at the conclusion of the second quarter of 2022." More than 160 Sweetgreen stores may be found in 13 different states.