As many of you are all too aware, rising food costs have led to restaurants adjusting their menus because of diminished profits. While many hesitate to increase menu prices in fear that this will reduce demand, it’s clear to anyone with an accounting degree or business acumen 101 that the increasing costs cannot be mitigated with simple menu adjustments but rather require more thorough menu engineering.
Some have even added “Supply Disruption” or “COVID-19 Recovery” fees.
In addition to strategic menu pricing adjustments, operators are going back to the basics of menu design. Called menu engineering, several key menu design strategies can increase profits and reduce costs during this unprecedented time in our industry.
Menu Engineering Trends
It’s estimated that diners spend less than 90 seconds looking over the menu. That’s a remarkable statistic when considering the time and forethought we put into the design, pricing, and layout. The good news is that we’ve learned what our customers look at and where their eyes wander during the 90-second scan. And knowing this means that we also know where to place the menu items that we’re hoping will entice our guests.
The first step is using food costs and sales data to determine which menu items are the most profitable, which require emphasizing, and which ones are best eliminated or reimagined. If costing your menu leaves you feeling slightly nauseous, consider turning to your distributor or an online tool. Don’t forget to include the amount of labor involved in the preparation. Some food may appear less costly when the ingredients are considered; however, the time it takes to prepare can make a significant difference.
Redesign your menu once you’ve figured out the menu items that help increase profits.
Some of the basics in menu design include photos and framing these items in eye-grabbing boxes. The golden triangle refers to how your guests’ eyes travel when they look at a menu. Researchers found that eyes travel to the middle of the menu first, then towards the top-right corner before traversing over to the left. The middle and top right corner is the magic spots, the place to highlight your high-margin items. It’s also recommended that each menu area only have seven items. Also, don’t forget the power of words and look at how you describe your delicious dishes.
As the saying goes, desperate times call for desperate measures. While not all restaurant venues can get away with this trend, some operators list their significant offerings as “Market Price.” This strategy requires due diligence on the part of your server, who will probably be asked about prices and why they are listed at market value ad infinitum.
Some experts suggest that a well-engineered menu can increase profits by as much as 15%. If you can increase the purchase of higher-margin items, you may be able to forego the dreaded market price.
Precision Inventory Management
During volatile markets, it’s best to slim down your menu. You’ll want to explore options and ensure all items are used in multiple menu selections. Not only will you find increased profits, but your BOH will be much happier, and you’ll find they’re more adept at creating the high-quality food you’ve imagined. You’ll also find they produce the food in less time and with greater efficiency.
While big restaurant chains can nail down prices far in advance, smaller units and independent brands can benefit from companies that help them locate products at the best price.
Restaurant forecasting uses historical data to help project future sales, which then help us make informed decisions regarding inventory and labor.
For example, you look at the data and find that chicken outperforms fish and beef, offering not quite so drastic rising food costs. Additionally, you note that there are several menu items with chicken as the primary ingredient that are selling better than average. You know these represent your sweet spot and highlight these items on your menu.
While many of us looked forward to returning to physical menus after the no-touch QR code explosion, the current market has found a place for menus that can be changed with one touch. QR codes can also be used exclusively for specials.
What does menu engineering mean?
Menu engineering is the process of designing your menu to highlight your higher-margin items.
How do you do menu engineering?
First, you need to cost your menu and analyze sales. Then, determine which items offer the highest margins and are the most popular among your guests. Third, use strategic placement strategies to call attention to these items.
Why is menu engineering important?
Some experts suggest that menu engineering can increase profits by as much as 15%. With today’s daily market fluctuations and supply chain upheavals, menu engineering has become vitally important in improving the bottom line.