Menu Analysis

1
Menu Analysis Engineering

• HRT383

2
References

• Mill, Robert Christie (1998) Restaurant
  Management Customers, operations, and employees
  / Menu Scoring Menu Engineering, pp 114-116.
  Upper Saddle River, N.J. Prentice Hall.
• Drysdale, John A. Jennifer Adams Aldrich
  (2002). Profitable menu planning / Chapter 5
  Menu Analysis, pp. 101-115. 3rd ed. Upper Saddle
  River, N.J. Prentice Hall, TX911.3.M45 D79
  2002 
• CD-ROM TX911.3.M45 D79 2002 

3
Objectives

• By the completion of this presentation you should
  be able to
• Analyze a menu for profitability
• Apply menu engineering to menu analysis

4
Important Terms

• Menu engineering
• Plowhorses
• Puzzles
• Stars
• Dogs

5
Introduction

• This presentation explains how to evaluate a menu
• When measuring a menu to see if it is successful
  2 criteria must be met to declare it a winner
• Must be profitable in terms of individual item
  profitability
• Most profitable item must be selling the best.

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Stars, Plowhorses, Puzzles, Dogs

• Method, called menu engineering, developed by
  Donald Smith Ph.D., Westin Hotels Distinguished
  Professor at Washington State University
• This method rates the menu by measuring each
  entrée as to its profitability (gross profit) and
  its sales. It then combines these measurements
  and places each menu item into one of four
  classifications.

Puzzle
Plow Horse
Dog
Star
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Contributing Margin

• Determine the contributing margin (CM) of each
  item
• CM same as items Gross Profit
• Use total food cost (include garnish,
  accompaniments served with entrée such as salad,
  potatoes, rolls, butter etc.).

Selling Price Food Cost Contributing Margin
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Contribution MarginDollars vs. Food Cost
Percentage
9
Contribution MarginDollars vs. Food Cost
Percentage
Which one will/should your server sell ?
10
Contribution MarginDollars vs. Food Cost
Percentage
Which one will/should your server sell ?
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Example
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Appetizers
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Popularity

• Average Popularity
• 80 of the average item sales per appetizer
• 100 / 5 X 80 16
• Popularity of each menu item
• Number of portions sold divided by total
  number of meals sold
• Crab Cake 54 / 117 34.62

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Popularity
15
HRT383 Dinner Appetizers
100
Popularity
16
0 Contribution Margin
6.47
16
HRT383 Dinner Appetizers
100
Popularity
Ravioli 5.05/24.36
En Croute 7.01/17.31
16
Duck
5.75/14.10
Cheese 6.28/9.62
0 Contribution Margin
6.47
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Menu Engineering
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The Four Key Menu Categories

• Plowhorses are items that are relatively popular
  but have a high contribution margin. Items in
  this category can have their menu prices
  increased or the portion size cut in a attempt to
  increase CM. If market is price resistant
• Stars have both high popularity and high CM
• Puzzles have relatively low popularity and high
  margins lower price.
• Dogs are both low in popularity and CM eliminate

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HRT383 Dinner Appetizers
100
Increase 8 - ? Cut Portion ?
Popularity
Ravioli 5.05/24.36
En Croute 7.01/17.31
16
Duck
5.75/14.10
ELIMINATE ?
Cheese 6.28/9.62
ELIMINATE ?
0 Contribution Margin
6.47
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Data Trap Spring 08

• See Dinner Hand Out for
• Main Courses

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Main Courses
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Popularity

• Average Popularity
• 80 of the average item sales per appetizer
• 100 / 9 X 80 8.88
• Popularity of each menu item
• Number of portions sold divided by total
  number of meals sold
• Rib Eye 131 / 708 18.5

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Main Courses
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Exercise

• Please work with your fellow students and come up
  with suggestions/decisions.

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HRT383 Dinner M/C
100
Popularity
8.88
0 Contribution Margin
14.60
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Main Courses
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Main Courses
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Main Courses
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The Four Key Menu Categories

• Plowhorses are items that are relatively popular
  but have a high contribution margin. Items in
  this category can have their menu prices
  increased or the portion size cut in a attempt to
  increase CM. If market is price resistant
• Stars have both high popularity and high CM
• Puzzles have relatively low popularity and high
  margins lower price.
• Dogs are both low in popularity and CM eliminate

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Main Courses
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Up Selling

• Your Favorite

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Placement

• Two Schools of thought
• Menu Sequence
• Menu should follow progression of meal
• Focal Points
• Use focal points on the menu to push certain menu
  items

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Focal Points
Single Sheet Menu
Twofold Menu
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Focal Points
Focal Point
Threefold Menu
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Specials

• Larger Bolder type than the rest of menu
• Longer description
• Concept of Closure
• peoples eyes are drawn to what ever is enclosed
  by a box
• Color, illustration, and/or pictures, bullets
  can be used to draw attention to signature items.

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Branding

• Fast food
• Coke / Pepsi
• TGIF
• Jack Daniels

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Menu Pricing

• Odd-Cents pricing
• Majority of prices end in either a 5 or a 9
• Price rounding.
• Within certain price bands, price increases have
  little negative impact on customers
• Placement

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Price Placement
39
Price Placement
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Conclusion

• Menu analysis is important
• If demographic studies, internal capacities, cost
  cards, and markups have been executed correctly,
  the score should be a good one
• Analysis should be done using either the Smith or
  the Hurst methods to ascertain the profitability
  of the menu
• If the analysis shows a poor menu, make
  improvements
• Good menu first step has been taken toward
  running a profitable operation.
• Its just that simple

41
Where to Get More Information

• Mill, Robert Christie (1998) Restaurant
  Management Customers, operations, and employees
  / Menu Scoring Menu Engineering, pp 114-116.
  Upper Saddle River, N.J. Prentice Hall.
• Drysdale, John A. Jennifer Adams Aldrich
  (2002). Profitable menu planning / Chapter 5
  Menu Analysis, pp. 101-115. 3rd ed. Upper Saddle
  River, N.J. Prentice Hall, TX911.3.M45 D79
  2002 
• CD-ROM TX911.3.M45 D79 2002 
• Most Menu FB Management Books