Should I keep it on my menu?

Should I keep it on my menu?

09/19/2018 Tags: Announcements, In the News

Should I keep it on my menu?

You want to build a successful menu, but what exactly is successful menu? In general, it is a menu that helps you increase sales. After you have defined what success means for you, how can you measure that success over time and ensure your menu stays successful? One strategy is “menu engineering”.”

Many factors play into the profitability of restaurants, but menu engineering should be a primary focus. Menu engineering includes the following:

Menu Design: The document’s aesthetic value and its attractiveness to customers.
Menu Organization: Where items are located and how a customer navigates or understands the menu.
Pricing: The price of items, and more importantly, the strategy behind how you arrived at a given price and how that price contributes to your overall profit.

Menu engineering looks at a few criteria, like number of plates sold, and profitability of each of those items and then puts each item in a category.

Plow Horses: Popular sellers with low profitability
Dogs: Low sellers with low profitability
Puzzles: Low sellers with high profitability
Stars: High sellers with high profitability

You obviously want more Stars on your menus than dogs. Plow Horses can be staples that your customers love. Puzzles might be your prestige or luxury items you push to diners with large budgets who want a truly unique experience.

Menu engineering attempts to leverage more dollars out of customers by offering them a better customer experience through higher-value items. By only concerning yourself with cost percentages, you might actually be leaving crucial dollars on the table or, in this case, in your customers’ wallets.

  • Items with high demand and high profit margins (Stars) obviously should be kept on the menu. You will rarely run these items as a “special,” and your customers will consistently purchase and pay for these dishes without needing a discount and will not be likely to stop purchasing them when prices increase.
  • Items with high demand and low profit margins (Plow Horses) are not hurting the business, but it takes a lot more work to make the same profit as the high-demand/high-profit dishes. Customers often see these items as a good deal. So, if you increase the prices, do so very slowly at very small intervals. You could also try a different location of the dish on your physical menu.
  • Items with low demand and high profit margins (Puzzles) are questionable. Maybe the physical location on the menu is not right, or maybe your customers do not want them because they are too expensive. Try lowering the price slightly to see if it raises interest in your customers.
  • Items with low demand and low profit margins (Dogs) should be taken off the menu whenever possible.

Menu engineering should be done continually. Product costs, season changes, and fads play a part in this. If you have any questions about menu engineering or would like help building a more successful menu, contact the Tourism & Hospitality Team at Casey Peterson, Ltd.

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