Sweetgreen opened six restaurants in roughly 60 days, bringing its fast-casual concept to new cities, suburban communities, and one of the country’s most recognizable shopping destinations.
The openings span Jacksonville, Florida; Nashville; Salt Lake City; McLean, Virginia; Minnesota’s Mall of America; and Princeton, New Jersey. They include the company’s first East Coast sweetlane drive-thru and a smaller grab-and-go restaurant, demonstrating how Sweetgreen is adapting its real estate strategy to different customer needs.
But the activity doesn’t signal an imminent acceleration in development. Sweetgreen is taking a more measured stance on expansion, with greater scrutiny of construction costs, restaurant formats, and long-term returns.
Chief development officer Ryan Slemons says the priority is ensuring each new restaurant has the right economics and fits the surrounding community.
“We’re maintaining a really high discipline right now on growth,” Slemons says. “What we say is we want to walk now so we can sprint later, and so we’re going to be very disciplined on the trajectory that we’re on and making sure that we’re getting the returns on our investment, and that’s of utmost importance.”
That discipline comes during a challenging period for the company. Sweetgreen’s same-store sales declined 6.2 percent in the second quarter, including a 2 percent drop in transactions and a 4.2 percent decline attributable to product mix. Revenue increased approximately 4 percent to $192.7 million.
The company finished the quarter with 287 restaurants, including 35 equipped with its automated Infinite Kitchen system. It opened four locations and closed two during the period.
Sweetgreen has also lowered its full-year outlook following consumer concerns surrounding a cyclospora outbreak that the company said was not connected to its restaurants. It now expects comparable sales to decline between 7 and 8 percent for the year.
Those challenges have put additional pressure on Sweetgreen to ensure its development pipeline contributes to profitability without adding unnecessary financial strain.
The company’s real estate strategy involves introducing Sweetgreen to new markets and adding restaurants in established territories where demand can support additional locations.
In evaluating potential sites, Slemons says demographics are among the most important considerations. The development team studies the characteristics of surrounding communities, customer behavior, and requests for new restaurants. Visibility and accessibility also factor into the decision.
The standards don’t change substantially between a first restaurant in a new city and an additional location in an established market.
“We’re trying to pick the best locations that are convenient for customers to visit our restaurants, whether it’s the first restaurant in the market or whether we’re densifying within existing markets. But as you know, in the restaurant space, site selection is critical, and so we want to make sure that for customers, it’s easy for them to shop at a restaurant, there’s good visibility—all that type of stuff when we’re making these decisions,” Slemons says.
Recent openings in Jacksonville, Nashville, and Salt Lake City have provided encouraging early indicators. Slemons says Sweetgreen has been particularly pleased with evening and weekend traffic.
The company expects to continue adding restaurants in those markets as it evaluates opportunities to build density around its existing footprint.
The opening in McLean offers another look at how Sweetgreen is pursuing suburban customers.
The restaurant features Sweetlane, a drive-thru pickup format that allows customers to retrieve digital orders without leaving their vehicles. It is the first such location on the East Coast, adding to a small collection of Sweetlane restaurants operating elsewhere in the country.
McLean’s residential character made it an attractive location for the format. For parents traveling with children or customers managing busy schedules, the pickup lane eliminates the need to park and walk into the restaurant.
Sweetgreen’s established digital ordering business provides a foundation for the concept, which is meant to remove another obstacle between customers and their meals.
“We only have a handful of them in the U.S. today, so we’re still very early on in the process of hearing customer feedback on it, but we’re pleased with the added convenience and what we’re seeing so far,” Slemons says.
The suburban opportunity doesn’t require Sweetgreen to change its food offering. Slemons says customers in residential communities and urban neighborhoods share similar expectations for the brand’s menu. The differences come down to how they use the restaurant.
For example, suburban locations may benefit from more seating, especially when serving families and customers dining outside work hours. Urban restaurants with significant lunchtime traffic may need less dining space and more efficient pickup areas.
That distinction is evident at Mall of America, where Sweetgreen opened a compact grab-and-go restaurant.
Infinite Kitchen adds another consideration. The company continues to operate a mix of automated and traditional restaurants, with installation decisions evaluated individually.
Construction costs are another significant variable.
The restaurant construction environment has changed since the pandemic, making it important for Sweetgreen to scrutinize its prototypes and the capital required for new locations.
Slemons is reviewing those expenses as part of the company’s development planning, a responsibility that comes as Sweetgreen seeks to improve restaurant-level profitability and rebuild average unit volumes.
During the brand’s Q2 earnings call, CEO Jonathan Neman indicated that development in 2027 would be conservative, potentially matching or falling below this year’s pace.
That leaves Sweetgreen with considerable room to expand geographically, but less urgency to pursue new restaurants simply to increase its footprint.
“We obviously just opened three new markets, which is a big deal, of course, so we’ll continue to densify around the markets that we have and then from a format standpoint, really what that comes down to is how the customer is going to shop our restaurant, and making sure that it’s ultimately convenient for them and that it fits into the community,” Slemons says.
