Dive Brief:
- Sweetgreen will redesign its loyalty program, which will be released in the first half of 2025, CEO and founder Jonathan Neman said during the company’s earnings call last week.
- The fast casual brand is expected to offer a points-based loyalty program with more frequent rewards, William Blair analyst Sharon Zackfia said in a report emailed to Restaurant Dive.
- Sweetgreen originally launched its loyalty program, Sweetpass, in 2023, when it offered a free and paid subscription. The subscription model gave guests various benefits including a $3-a-day discount for a $10 per month or $100 per year subscription fee.
Dive Insight:
Several other chains have adjusted their rewards programs to offer more rewards sooner, namely Domino’s, Krispy Kreme and Red Robin. These chains saw growth in membership following the rollout of the new programs. Red Robin’s Loyalty 2.0 exceeded management expectations with more customers signing up and visiting more, executives said during a third quarter earnings call.
Despite its Sweetpass subscription testing well, Sweetgreen saw disappointing results since customers found the tiered structure too complicated, Zackfia said. This response comes after the chain spent years testing different elements of loyalty before releasing its Sweetpass program.
“The new loyalty program is not expected to result in a large same-store sales lift in its first year, but is expected to bolster sales over time as it provides a pathway for incentivizing frequency,” Zackfia said.
Management is also considering various marketing offers to bolster loyalty guest frequency, Zackfia said. That could be something like Chipotle’s occasional “Guac Mode” promotion, which gives free guacamole to rewards customers. Zackfia said Sweetgreen could use ripple fries, which are currently in test, instead.
In addition to a renovated loyalty program, the chain is testing new menu items to boost frequency. In addition to ripple fries, which are air-fried with avocado oil and served with pickled ketchup and garlic aioli sauce, the chain is looking into new sides, desserts and drinks, Neman said.
Sweetgreen has been adding new protein options, including caramelized garlic steak. Combined with its fall harvest menu that rolled out mid-September, the chain is seeing strong sales drivers for dinner and the weekends. These dayparts also have higher average checks than the weekday lunch.
Sweetgreen posted same-store sales growth of 6% during the third quarter, which included a 4% benefit from menu price and 2% growth in traffic and sales mix, Neman said. Growth was more rapid in emerging markets like the Midwest, Texas and Southeast which had comps in the double-digits, he said.
