Maximising Profits Through Menu Analysis and Menu Engineering

So, customers should be flooding into your restaurant, attracted by this amazing experience and menu. You are still not achieving the required gross profit, why?

It is all very well checking the overall food cost, but it is also important the contribution each dish on your menu makes to your profitability.

Although menu analysis can only be done using historical data (data that already exists), menu analysis will help you to monitor whether your efforts to maximise profits were effective. It will also offer you some general rules that you can use to improve the profitability of a menu.

Menu analysis and engineering is a matrix that you can use to evaluate and optimise your menu, comparing profitability and popularity.

Regular menu engineering can help you to increase your business profits. Using the framework allows you to:

• Identify and eliminate non profitable dishes from your menu.
• Highlight the more profitable dishes.
• Identify which dishes are popular.

To do an analysis, you need to have detailed costings of each of your menu items as well as your historical sales data.

The views of people in the establishment such as service staff, management and even customer reviews are important as these will give you various perspectives.

For example, you may have an item on the menu that has a low profitability and low sales, however your waiter may tell you that they have a few important guests that talk about your restaurant, and love the dish, you may be inclined to keep it on the menu. Once you have completed the analysis you can then redesign your menu with consideration to:

• Your brand
• Your customer and their needs
• Your required cost margins
• Applying the psychology principles of menu design.

The 4 quadrants of the menu engineering matrix

The menu engineering matrix is

STAR: High profitability and high popularity

A star is a menu item that produces both a high gross profit and high sales volume. A star is both profitable and popular, don’t try to get rid of it, don’t experiment with it, just keep them on the menu and ensure they are highly visible.

DOG: Low profitability and low popularity

A dog is a menu item that produces a comparatively low gross profit and accounts for relatively low sales. A dog is both unprofitable and unpopular, unless you try to reinvent them, consider removing them from the menu.

PLOW HORSE: Low profitability and high popularity

A plow horse is menu item that produces a low gross profit but accounts for high sales. A Plow horse is popular but relatively unprofitable. It should be kept on the menu, but you should try to increase the gross profit without decreasing the sales. You could look for ways to make them more profitable such as decreasing portion size or train staff to pair this with another sale such as a drink.

PUZZLE: High profitability and low popularity

A puzzle is a menu item that produces high gross profit but low sales. A puzzle is comparatively profitable but relatively unpopular. They are usually high-priced items that are difficult to sell. Keep them on the menu but try to increase their popularity through specials, social media, renaming and changing the pricing slightly.

How often should you analyse your menu?

Menu analysis is time consuming so, if you change your menus from time to time, probably best before your next menu change, alternatively quarterly or biannually. Fortunately, there is technology available so if you are fortunate enough to have this in your system, you will be able to get this done quite easily.

In our next step we will work through an actual example.