Menu optimization involves analyzing consumer preferences and behavior while also scrutinizing each menu item’s effect on the business. It is an important tool in the restaurant business that, when used regularly, provides actionable insights. It also helps drive profitability, which is at the core of all our businesses.
What are some basic steps I can take to optimize my menu?
I prefer to start the menu-optimization process not from the consumer side, but rather from the business side. List each menu item by its profit margin, measured both as a percentage and in actual dollars.
For instance, a cup of coffee has a high profit-margin percentage, but the actual dollars and cents made on each cup of coffee are small. When looking at menu items, I like to focus on the actual money to the bottom line and less on the percentage.
Once you understand where you are making money, the next step is to measure the sales of each item over a specific period. In the ideal world, your most profitable items also represent the highest sales volumes. If that is the case, pat yourself on the back—but still focus on your other menu items.
Pay particular attention to underperforming items that still deliver good profits. Increasing their volume can dramatically help your bottom line. How do you increase sales? In restaurants, we analyze factors such as where the items are placed on the menu, their pricing compared to other items and their descriptions.
If you use a menu board, study the science of menu engineering, which explains where and how to position the items you want to sell. Menu engineering also reveals that tantalizing, authentic descriptions and high-quality pictures help sell the items. For the c-store environment, look closely at the location of the items you want to sell.
Consider other reasons why these high-profit items do not have high sales volume. Perhaps you need to adjust their appearance, flavor or texture to meet consumer demand. Maybe you are not serving or holding the food attractively; there’s nothing like a dirty food area to kill sales.
The menu-optimization process also highlights items that do not deliver good profits. You need to eliminate some of these, but be careful not to do this too fast. Some may be loss leaders that are familiar, traditional or loved—and bring people into the store to make other purchases.
Christopher Koetke is vice president of Kendall College School of Culinary Arts in Chicago. He is a certified executive chef and certified culinary educator by the American Culinary Federation. Have a question for him? Email awestra @winsightmedia.com, subject “Ask the Chef.”
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