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| Mar 04, 2022
On Thursday, Sweetgreen reported strong fourth quarter earnings, signaling that office workers were back almost in full force based on the success of the fast-casual restaurant’s serve-yourself outpost locations developed pre-pandemic.
In the fourth quarter ended Dec. 26, 2021, same-store sales increased 36% at Sweetgreen, and the brand opened 10 net new restaurants.
“We’ve been pleasantly surprised with [the] outposts…. it’s an indicator of a return to office,” said Sweetgreen CEO Jonathan Neman on the brand’s first-ever quarterly earnings call on Thursday, following the company’s IPO in October 2021.
Sweetgreen has 17 more outposts launching next week, according to Neman.
But doesn’t encompass all the brand’s growth. In fiscal year 2021, Sweetgreen opened 31 net new restaurants and entered two new markets – Dallas and Atlanta. According to Neman, the brand is on track to double from its current 151 units in the next 3-5 years and be at 1,000 units in the next decade.
“Our goal is to be as ubiquitous as traditional fast food,” he said.
Sweetgreen has been accomplishing its growth mainly through technology. A longtime leader in restaurant technology, the Los Angeles-based brand realized digital connection is key from the start.
“Early in our history we realized digital connection is essential to our career,” said Neman.
That includes things like digital lockers and a mobile app.
“We consider ourselves an industry leader in the shift to digital,” he said.
In 2021, 46% of total revenue came from its own digital channels.
Delivery, however, comes through a third party. During 2021, the brand partnered with DoorDash as a primary delivery business to increase its radii, improve delivery rates and increase speed.
“We are very pleased with the stickiness of our delivery business,” said chief financial officer Mitch Reback during the earnings call.
Reback also discussed the restaurant’s menu in light of inflation and everyone’s favorite phrase right now: menu price increases.
“We believe as a company that we have a lot of pricing power with our customer…we have a cult-like following,” he said.
At the beginning of 2021, the company raised prices about 6%. They expect inflation costs to remain about the same in 2022 but did not comment on menu price increases.
The menu itself was also a topic of conversation as it’s considered a point of acquisition of new customers. Neman commented that there would be more innovations around the dinner market and heartier foods, building on the success of the hot honey plate.
“How can we push our core menu to acquire new customers for us?” he asked, and even brought up the possibility of digital-only exclusives for customers.
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