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 Spring 08 See Lunch Hand Out 01 14 19 HRT383 10 Desserts Contri Quan Popularity Menu Plate F C bution tity Net Total MENU ITEM Price Cost Margin Sold Income Cost RKR Apple Crisp 5 00 2 02 40 40 2 98 65 325 00 131 30 44 83 Sampler 5 00 1 71 34 20 3 29 27 135 00 46 17 18 62 Choc Bread Pudding 5 00 1 70 34 00 3 30 20 100 00 34 00 13 79 Cr me Brulee 5 00 0 45 9 00 4 55 33 165 00 14 85 22 76 145 725 00 226 32 TOTAL DESSERTS 01 14 19 31 22 3 44 HRT383 Menu Engineering 11 Popularity Average Popularity 80 of the average item sales per Dessert 100 4 X 80 20 01 14 19 HRT383 12 Desserts Contri Quan Popularity Menu Plate F C bution tity Net Total MENU ITEM Price Cost Margin Sold Income Cost RKR Apple Crisp 5 00 2 02 40 40 2 98 65 325 00 131 30 44 83 Sampler 5 00 1 71 34 20 3 29 27 135 00 46 17 18 62 Choc Bread Pudding 5 00 1 70 34 00 3 30 20 100 00 34 00 13 79 Cr me Brulee 5 00 0 45 9 00 4 55 33 165 00 14 85 22 76 145 725 00 226 32 20 TOTAL DESSERTS 01 14 19 31 22 3 44 HRT383 Menu Engineering 13 HRT383 Lunch Desserts 100 Plowhorse Star Popularity 20 Dog Puzzle 01 14 19 0 Contribution Margin HRT383 3 44 14 HRT383 Lunch Desserts 100 Plowhorse Star Apple Crisp 2 98 44 83 Popularity Cr me Brulee 4 55 22 76 20 Dog 01 14 19 0 Sampler 3 29 18 62 Choc BP 3 30 13 79 Contribution Margin HRT383 3 44 Puzzle 15 Desserts MENU ITEM Contri Quan Popularity Menu Plate F C bution tity Net Total Price Cost Margin Sold Income Cost Engineering Menu RKR Apple Crisp 5 00 2 02 40 40 2 98 65 325 00 131 30 44 83 Plow Horse Sampler 5 00 1 71 34 20 3 29 27 135 00 46 17 18 62 Dog Choc Bread Pudding 5 00 1 70 34 00 3 30 20 100 00 34 00 13 79 Dog Cr me Brulee 5 00 0 45 9 00 4 55 33 165 00 14 85 22 76 Star 145 725 00 226 32 20 TOTAL DESSERTS 01 14 19 31 22 3 44 HRT383 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 Increase Apple Crisp Cut Portion 2 98 44 83 Popularity Cr me Brulee 4 55 22 76 20 Eliminate Dog 01 14 19 0 Sampler 3 29 18 62 Choc BP 3 30 13 79 Contribution Margin HRT383 3 44 Puzzle 18 Data Trap Spring 08 See Lunch Hand Out for Main 01 14 19 Courses HRT383 19 Lunch Main Courses Contributi on Quantit y Net Total Menu Plate Price Cost Margin Sold Income Cost Chinese Chix Salad 10 00 2 12 21 20 7 88 26 260 00 55 12 6 47 SouthWestern Salad 10 00 2 03 20 30 7 97 29 290 00 58 87 7 21 Cobb Salad 10 00 2 91 29 10 7 09 26 260 00 75 66 6 47 Caesar Salad 8 00 1 58 19 75 6 42 9 72 00 14 22 2 24 Caesar Salad w Chicken 10 00 2 58 25 80 7 42 11 110 00 28 38 2 74 Caesar Salad with Shrimp 10 00 3 08 30 80 6 92 4 40 00 12 32 1 00 Cheese Quesadilla 8 00 3 14 39 25 4 86 38 304 00 119 32 9 45 Quesadilla with Chicken 10 00 4 73 47 30 5 27 8 80 00 37 84 1 99 Quesadilla with Shrimp 10 00 5 02 50 20 4 98 7 70 00 35 14 1 74 Fish Tacos 10 00 3 07 30 70 6 93 38 380 00 116 66 9 45 Burger 9 00 2 44 27 11 6 56 36 324 00 87 84 8 96 Turkado 8 00 2 42 30 25 5 58 51 408 00 123 42 12 69 Ravioli 9 00 2 81 31 22 6 19 43 387 00 120 83 10 70 Halibut 12 00 3 02 25 …