By hoping to embrace a cashless future, Sweetgreen may have been alienating some customers — and thanks to new legislation, potentially breaking the law.
— Erika Adams
Starting in December 2016, fast-casual salad chain Sweetgreen stopped accepting cash at restaurants across the U.S. The move was immediately controversial, but it took more than two years for the company to reverse the decision.
On Thursday, the company announced that its six Philadelphia locations will accept old-fashioned paper currency, beginning July 1. By Sept. 30, all 94 current Sweetgreen locations will accept cash. (In Boston, where laws already in place prohibit cashless retail establishments, the 15 Sweetgreens never stopped accepting paper currency.) The chain, currently valued over $1 billion, expects to grow to more than 100 stores by the end of 2019.
Philadelphia’s City Council in February approved a bill banning stores that don’t accept cash. Critics argue that the practice discriminates against customers who might not have access to lines of credit or mobile payment apps. Six percent of Philadelphians lack a bank account, according to a Federal Deposit Insurance Corp. survey. More cities have proposed bans, including New York and San Francisco; the state of New Jersey on March 18 made it mandatory for businesses to accept cash.
Sweetgreen co-founder and co-Chief Executive Officer Nicolas Jammet says the chain first went cashless to appeal to younger consumers who prefer electronic payments. “We believed there were many advantages that would benefit the SG community, including employee safety—reducing incidents of robbery—and that it would speed up service in our restaurants,” he says. The model has also been adopted by such other fast-casual chains as Dig Inn and Chopt Creative Salad Co.
Now the company is responding to the outcry. Philadelphia’s announcement “didn’t take us by surprise,” says Jammet. The company had been seriously discussing the policy for the prior six months, he says. “As a business, we are in a very different place than we were three years ago, and that requires evolution.” Sweetgreen is currently testing equipment (such as cash registers) and processes (armored vehicle pickups and deliveries and asset-protection consultants) to implement the change. The company says that because it is in the process of testing, it can’t quantify the expense of making the change.
The chain estimates 5 percent of customers will pay in cash.
Jammet himself still occasionally uses cash. “It’s rare, but sometimes when I’m getting a coffee or buying something at the farmer’s market, it will be a cash transaction,” he says. He did not, however, say if he would test the new service the next time he pays for a Chicken Pesto Parm Bowl.
©2019 Bloomberg L.P.
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