Use Menu Engineering to Increase Restaurant Profits
Menu engineering is one way to increase restaurant sales. If you understand that your menu is a sales tool, you should maximize it to maximize your restaurant sales. Watch this video, or keep reading below, to learn more about menu engineering and what you need to do first to make it effective.
Before you can really engineer your menu, you must have recipe costing cards in place for every item on your menu. If you don't have these in place, please search my YouTube channel for videos about recipe costing cards to make sure you are set up correctly before attempting menu engineering. I will also create a recipe costing cards online course in the coming months.
How to do menu engineering
Let's assume you have recipe costing cards and know what every item costs. What you care about is how much product you use in dollar value and what you're going to sell it for.
Next, you need your mix report. How many items did you sell of each of those items? Run it for a date range for at least a month, or better yet, three. This report will total what was sold and for how much. This report will give you what your ideal or theoretical food cost should be based on what customers have purchased.
Once you have this report, you will want to identify changes that can be made to decrease your cost before you get to menu engineering. You can look to purchase different products of like or better quality but cost less. For example - trade out expensive pine nuts for shaved almonds. Or you can reduce the portion sizes. A good way to gauge what you can change is to monitor your garbage cans, which show you what's being over served.
Now the menu engineering starts. The item-by-item mix report/PMIX report, etc., shows you changes to make to increase profits. Look for the items that make you the most money. Then design your menu to influence your guests’ purchasing decisions by doing some menu merchandising. Menu merchandising is a restaurant owner’s best tool to increasing profits.
**** Remember, you can not do this effectively if you don't have up-to-date and accurate recipe costing cards in place. The following strategies won’t work long term.****
1) Although eye movement has been suggested as a way to woo a customer to your high-profit items, studies show people read menus like books - from front to back and in order. Instead, focus on making an item stand out with a box, highlight, star, picture, etc. These items will sell. If you are a restaurant where pictures are appropriate… if you put a photo of the item in the menu… be prepared. You will sell the heck out of it. I’m not kidding.
2) Don’t let your menu be a price list. A price list menu has an item name and then to the far right it lists the price all by itself. Stick that price at the end of the item description without a dollar sign and one font size smaller. Let your guest read the description and want it first, rather than shop by the price they want to pay.
3) If you have categories, such as appetizers, that have 10 items in them, understand that in most cases the first, second and last items will sell the most in that category. So place your priority (i.e., most profitable) items in those spots to move them.
4) Cut down the number of items on your menu. If you have fewer menu items then you have less money in inventory sitting on your shelves, and less waste, less labor and consistent food. Having too much on your menu can cost you a lot of money.
Follow this process to make more money. You will see a 3-7% cut in your food costs.
If you would like to learn more about the importance of systems and how to run a restaurant, read our free special report, Is Your Food Distributor Screwing You? 5 Things You Can Do Now to Lower Food Cost. Download it here. Be sure to visit my YouTube channel for more helpful restaurant management video tips.
