Menu Analysis Engineering HRT383 By Dr Ben Dewald 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 HRT 382 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 Apply menu scoring methods to menu analysis HRT 382 3 Important Terms Menu engineering 01 14 19 Plowhorses Puzzles Stars Dogs Menu scoring Placement Pricing HRT 382 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 HRT 382 5 Stars Plowhorses Puzzles Dogs 1st 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 HRT 382 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 HRT 382 7 Contribution Margin Dollars vs Food Cost Percentage Steak Dinner Fish Sandwich Coffee Selling Price 15 00 4 00 0 75 Cost 7 50 1 00 0 15 Food Cost 50 25 20 Cont Margin 7 50 3 00 0 60 01 14 19 HRT 382 8 Menu Engineering 1 2 3 Menu Item Number Sold 4 5 Item Sales Food Cost Price Percentage Total Sales 2 X 3 6 10 Total Food C M Cost 4 X 5 Chicken 65 9 95 35 646 75 226 36 6 47 Beef 75 11 95 38 896 25 340 58 7 41 Turkey 90 10 25 31 922 50 285 98 7 07 Filet 55 12 95 45 712 25 320 51 7 12 3 177 75 1 173 43 285 7 Food Cost Percentage 6 5 39 93 8 Total Contribution to Margin 5 6 2 004 32 7 03 9 Average Contribution Margin Customer 8 2 10 Contribution Margin per menu Item 5 6 2 01 14 19 HRT 382 9 Menu Engineering 11 Average Popularity 80 of the average item sales per entr e 100 4 X 80 20 12 Popularity of each menu item Number of portions sold divided by total number of meals sold Chicken 65 285 22 8 Beef 75 285 26 3 Turkey 90 285 31 6 Filet 55 285 19 3 01 14 19 HRT 382 10 Menu Engineering Analysis 100 Plowhorse Star Turkey 7 07 31 6 Popularity Beef 7 4126 3 Chicken 6 47 22 8 20 Filet 7 12 19 3 Puzzle Dog 01 14 19 0 Contribution Margin 7 03 HRT 382 8 11 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 Dogs are both low in popularity and CM 01 14 19 HRT 382 12 Menu Engineering Analysis 100 Plowhorse Star Turkey 7 07 31 6 Popularity Beef 7 4126 3 Chicken 6 47 22 8 20 Filet 7 12 19 3 Puzzle Dog 01 14 19 0 Contribution Margin 7 03 HRT 382 8 13 Menu Scoring Method developed by Michael Hurst Professor of Restaurant Management at Florida International University a restaurant owner and past president of the NRA Devised to ascertain whether menu changes additions deletions and price adjustments actually improved the profitability of the menu by comparisons of a menu score One advantage quick to complete because it does not track every menu item 01 14 19 HRT 382 14 Menu Scoring Combines profitability and popularity of menu items to arrive a a consensus score The higher the score the better the menu An existing menu can be scored then compared with a proposed menu after sales for the new menu have been estimated 01 14 19 HRT 382 15 Menu Scoring 1 2 3 4 5 6 Menu Item Number Sold Item Sales Price Food Cost Percentage Total Sales 2 X 3 Total Food Cost 4 X 5 Chicken 65 9 95 35 646 75 226 36 Beef 75 11 95 38 896 25 340 58 Turkey 90 10 25 31 922 50 285 98 Filet 55 12 95 45 712 25 320 51 3 177 75 1 173 43 Total 285 7 Meal Check Average 5 2 11 15 8 Gross Profit 5 6 2 004 32 9 Gross Profit 8 5 63 10 Gross Profit Average Meal 7 x 9 7 02 11 Total Meals Served 450 12 Popularity of Meals Analyzed 2 11 63 13 Menu Score 10382 x 12 4 42 01 14 19 HRT 16 The Higher the Score the More Profitable the Menu This method takes into account not only of items sold but also their contributing profit 01 14 19 HRT 382 17 Placement Two Schools of thought 1 Menu Sequence Menu should follow progression of meal 2 Focal Points 01 14 19 Use focal points on the menu to push certain menu items HRT 382 18 Focal Points Focal Point Focal Point Single Sheet Menu 01 14 19 Twofold Menu HRT 382 19 Focal Points 2 4 Focal Point 3 5 Threefold Menu 01 14 19 HRT 382 20 Specials Larger Bolder type than the rest of menu Longer description Concept of Closure people s eyes are drawn to what ever is enclosed by a box Color illustration and or pictures bullets can be used to draw attention to signature items 01 14 19 HRT 382 21 Branding Fast food Coke Pepsi TGIF Jack Daniels 01 14 19 HRT 382 22 Menu Pricing Odd Cents pricing Majority of prices end in either a 5 or a 9 Price rounding Within certain price bands price increases have little negative impact on customers Placement 01 14 19 HRT 382 23 Price Placement Baked Chicken 8 99 Lemon Sole 11 99 Lamb Steak 12 99 Swordfish Steak 14 99 BAKED CHICKEN Tender pieces of chicken breast 8 99 LEMON SOLE Fresh filets saut ed with lemon caper sauce 11 99 LAMB STEAK Center cut of lamb served on a bed of rice 12 99 SWORDFISH STEAK Charcoal grilled served with beurre blanc 14 99 01 14 19 …