Menu Analysis Engineering HRT383 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 01 14 19 HRT383 2 Objectives By the completion of this presentation you should be able to 01 14 19 Analyze a menu for profitability Apply menu engineering to menu analysis Price menu items Locate menu items on a menu HRT383 3 Important Terms Menu engineering 01 14 19 Menu Plowhorses Puzzles Stars Dogs HRT383 Placement Pricing 4 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 1 2 01 14 19 Must be profitable in terms of individual item profitability Most profitable item must be selling the best HRT383 5 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 entr e as to its profitability gross profit and its sales It then combines these measurements and places each menu item into one of four classifications Star 01 14 19 Plow Horse Do g HRT383 Puzzle 6 Contributing Margin Determine the contributing margin CM of each item Selling Price Food Cost Contributing Margin 01 14 19 CM same as item s Gross Profit Use total food cost include garnish accompaniments served with entr e such as salad potatoes rolls butter etc HRT383 7 Contribution Margin Dollars vs Food Cost Percentage Sirloin Pasta Coffee Selling Price 22 00 18 00 2 00 Cost 10 36 4 54 0 19 Food Cost 47 09 25 22 9 5 Cont Margin 11 64 13 46 1 81 01 14 19 HRT383 8 Contribution Margin Dollars vs Food Cost Percentage Sirloin Pasta Coffee Selling Price 22 00 18 00 2 00 Cost 10 36 4 54 0 19 Food Cost 47 09 25 22 9 5 Cont Margin 11 64 13 46 1 81 01 14 19 HRT383 9 Data Trap Winter 08 See Lunch Hand Out 01 14 19 HRT383 10 Desserts Menu Plate F C Contribution Quantity Net Total Price Cost Margin Sold Income Cost RKR Apple Crisp 5 00 0 82 16 40 4 18 70 350 00 57 40 Sampler 5 00 3 00 60 00 2 00 19 95 00 57 00 Choc Cake 5 00 2 85 57 00 2 15 37 185 00 105 45 Berries Pastry 5 00 1 10 22 00 3 90 29 145 00 31 90 155 775 00 251 75 MENU ITEM TOTAL DESSERTS 01 14 19 32 48 HRT383 3 38 11 Popularity Average Popularity 80 of the average item sales per Dessert 100 4 X 80 20 01 14 19 HRT383 12 Desserts Menu Plate F C Contribution Quantity MENU ITEM Price Cost Margin Sold RKR Apple Crisp 5 00 0 82 16 40 4 18 70 350 00 57 40 45 16 Sampler 5 00 3 00 60 00 2 00 19 95 00 57 00 12 26 Choc Cake 5 00 2 85 57 00 2 15 37 185 00 105 45 23 87 Berries Pastry 5 00 1 10 22 00 3 90 29 145 00 31 90 18 71 155 775 00 251 75 TOTAL DESSERTS 01 14 19 32 48 3 38 HRT383 Net Incom e Total Popularity Cost 20 13 HRT383 Lunch Desserts 100 Plowhorse Star Popularity 20 Dog Puzzle 01 14 19 0 Contribution Margin HRT383 3 38 14 HRT383 Lunch Desserts 100 Plowhorse Star Apple Crisp 4 18 45 16 Popularity Choc Cake 2 15 23 87 20 B Pastry 3 90 18 71 Sampler 2 00 12 26 Puzzle 01 14 19 0 Contribution Margin HRT383 3 38 15 Menu Engineering Menu Plate F C Contribu Quanti tion ty Net Total Populari ty Incom Menu Engineerin g Price Cost Margin Sold e Cost RKR Apple Crisp 5 00 0 82 16 40 4 18 70 350 00 57 40 45 16 STAR Sampler 5 00 3 00 60 00 2 00 19 95 00 57 00 12 26 DOG Choc Cake 5 00 2 85 57 00 2 15 37 185 00 105 45 23 87 Plow Horse Berries Pastry 5 00 1 10 22 00 3 90 29 145 00 31 90 18 71 PUZZLE 155 775 00 251 75 MENU ITEM TOTAL DESSERTS 01 14 19 32 48 3 38 HRT383 20 16 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 01 14 19 HRT383 17 HRT383 Lunch Desserts 100 Plowhorse Star Apple Crisp 4 18 45 16 Popularity Increase Choc Cake Cut Portion 2 15 23 87 20 Eliminate Sampler 2 00 12 26 01 14 19 0 Contribution Margin HRT383 B Pastry 3 90 18 71 Lower Price Puzzle 3 38 18 Data Trap Spring 08 See Lunch Hand Out for Main 01 14 19 Courses HRT383 19 Main Courses Contributio Menu Plate Price Cost Margin Chinese Chix Salad 10 00 7 39 73 90 South Western Salad 10 00 1 72 Cobb Salad 10 00 Caesar Salad Quantit Net Total Sold Income Cost 2 61 31 310 00 229 09 5 04 DOG 17 20 8 28 48 480 00 82 56 7 80 STAR 2 93 29 30 7 07 46 460 00 134 78 7 48 STAR 8 00 1 58 19 75 6 42 2 16 00 3 16 0 33 3 25 Caesar Salad with Chicken 10 00 2 58 25 80 7 42 13 130 00 33 54 2 11 PUZZLE Caesar Salad with Shrimp 10 00 3 08 30 80 6 92 5 50 00 15 40 0 81 Cheese Quesadilla 7 00 3 27 46 71 3 73 39 273 00 127 53 6 34 12 03 Quesadilla with Chicken 9 00 4 73 52 56 4 27 23 207 00 108 79 3 74 Plow Horse Quesadilla with Shrimp 9 00 5 02 55 78 3 98 12 108 00 60 24 1 95 Fish Tacos 10 00 2 74 27 40 7 26 44 440 00 120 56 7 15 PUZZLE Burger 9 00 2 14 23 78 6 86 45 405 00 96 30 7 32 STAR Turkado 8 00 2 42 30 25 5 58 70 560 00 169 40 11 38 Plow Horse Ravioli 9 00 4 03 44 78 4 97 53 477 00 213 59 8 62 STAR Salmon 12 00 3 39 28 25 8 61 121 1452 00 410 …