Restaurant chain Sweetgreen laid off five percent of its support center workforce due to a drop in sales caused by the Covid-19 pandemic.

The Los Angeles-based company stated that its “erratic urban rebound” following the pandemic caused a sales growth lag.

The shift toward hybrid or fully remote work has had an impact on restaurants in metropolitan areas that primarily serve office employees.

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Fast-casual restaurants that once dominated city centers are now among those seeing weaker sales as a result.

Sweetgreen, a popular lunchtime spot, hopes to return to profitability after the restructure.

Summer is typically Sweetgreen’s peak season, but the business did not see an increase in sales during the season.

The company said it first became aware of the sales drop around Memorial Day, prompting it to reduce its forecasts.

The salad chain plans to relocate its support center to a smaller facility.

The business now anticipates same-store sales of 13 percent to 19 percent this year, which is still lower than the forecasted 26 percent.

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Even before the pandemic, fast casual was making its way out of the city and into suburban areas.

It still has a strong presence in those areas, but it is attempting to move away from high-density areas.

CFO Mitch Reback said: “At the end of 2019, our footprint was 65% urban, 35% suburban. Today it’s 50/50.” 

“At the end of 2019, our urban restaurants had an AUV (average sales) of $3.1 million and our suburban restaurants had an AUV of $2.7 million.”

“At the end of the second quarter of 2022, AUVs flipped (and) urban SUVs are now $2.7 million and suburban EVs are $3.1 million.”

Sweetgreen has over 160 locations in 13 states throughout the United States.

Source: Yahoo

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