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 13 19 HRT383 2 Objectives By the completion of this presentation you should be able to 01 13 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 13 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 13 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 13 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 13 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 13 19 HRT383 8 Data Trap Spring 06 See Lunch Hand Out 01 13 19 HRT383 9 Menu Engineering 1 2 3 4 5 Menu Item Number Sold Item Sales Price Food Cost Percentage Total Sales 2 X 3 Apple Crisp 112 4 00 20 50 448 00 91 84 3 18 Choc Cake 22 4 00 70 75 88 00 62 26 1 17 Ice Cream 61 400 34 00 244 00 82 96 2 64 Mngr Special 75 4 00 41 75 300 00 125 25 2 33 1080 00 362 31 Soup Salad Total 270 6 10 Total Food C M Cost 4 X 5 7 Food Cost Percentage 6 5 33 55 8 Total Contribution to Margin 5 6 717 69 9 Average Contribution Margin Customer 8 2 2 66 10 Contribution Margin per menu Item 5 6 2 01 13 19 HRT383 10 Menu Engineering 11 Average Popularity 80 of the average item sales per appetizer 100 4 X 80 20 12 Popularity of each menu item Number of portions sold divided by total number of meals sold Apple Crisp 112 270 41 48 Choc Cake 22 270 8 15 Ice Cream 61 270 22 59 Mngr SpecialD 75 270 27 78 01 13 19 HRT383 11 HRT383 Lunch Desserts 100 Plowhorse Star Popularity 20 Dog Puzzle 01 13 19 0 Contribution Margin HRT383 2 66 12 HRT383 Lunch Desserts 100 Plowhorse Star Apple Crisp 3 28 41 48 Manager Special 2 33 27 78 Popularity Ice Cream 2 64 22 59 16 Choc Cake 1 17 8 15 Dog 01 13 19 0 Puzzle Contribution Margin HRT383 2 46 13 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 13 19 HRT383 14 HRT383 Lunch Desserts 100 Plowhorse Star Apple Crisp 3 28 41 48 Manager Special 2 33 27 78 Popularity Ice Cream 2 64 22 59 16 Eliminate Choc Cake 1 17 8 15 Dog 01 13 19 0 Puzzle Contribution Margin HRT383 2 46 15 Data Trap Spring 06 See Lunch Hand Out for Main 01 13 19 Courses HRT383 16 Exercise Please work with your fellow students and come up with suggestions decisions 01 13 19 HRT383 17 HRT383 Lunch Main Courses 100 Plowhorse Star Popularity 5 Dog 01 13 19 0 Puzzle Contribution Margin HRT383 5 10 18 Main Courses Menu Plate Price Cost Caesar Salad 8 00 0 97 Caesar Salad with Chicken 9 00 Caesar Salad with Shrimp Food Cost Contribution Quantit y Net Total Popularity M E Margin Sold Income Cost 12 13 7 03 16 128 00 15 52 1 83 2 08 23 11 6 92 16 144 00 33 28 1 83 9 00 2 75 30 56 6 25 6 54 00 16 50 0 69 Cobb Salad 9 00 2 93 32 56 6 07 38 342 00 111 34 4 35 Southwest 10 00 3 78 37 80 6 22 53 530 00 200 34 6 06 Cheese Quesadilla 6 00 1 72 28 67 4 28 35 210 00 60 20 4 00 Quesadilla with Chicken 7 00 2 83 40 43 4 17 34 238 00 96 22 3 89 Quesadilla with Shrimp 7 00 3 27 46 71 3 73 23 161 00 75 21 2 63 Turkcado 8 00 2 42 30 25 5 58 128 1024 00 309 76 14 65 Star Fish Tacos 9 00 3 07 34 11 5 93 91 819 00 279 37 10 41 Plow Horse RKR Burger 7 00 2 71 38 71 4 29 39 273 00 105 69 4 46 Baconand or Cheddar Burger 8 00 3 37 42 13 4 63 9 72 00 30 33 1 03 5 49 Halibut 10 00 5 39 53 90 4 61 139 1390 00 749 21 15 90 Plow Horse French Dip 8 00 3 15 39 38 4 85 140 1120 00 441 00 16 02 Veggie Laz 8 00 3 52 44 00 4 48 107 856 00 376 64 12 24 874 7361 00 2900 61 MENU ITEM MAIN DISHES 01 13 19 39 41 5 10 HRT383 4 35 Star 10 53 Plow Horse 5 00 19 Main Courses Menu Plate Price Cost Caesar Salad 8 00 0 97 Caesar Salad with Chicken 9 00 Caesar Salad with Shrimp Food Cost Contribution Quantit y Net Total Popularity M E Margin Sold Income Cost 12 13 7 03 16 128 00 15 52 1 83 2 08 23 11 6 92 16 144 00 33 28 1 83 9 00 2 75 30 56 6 25 6 54 00 16 50 0 69 Cobb Salad 9 00 2 93 32 56 6 07 38 342 00 111 34 4 35 Southwest 10 00 3 78 37 80 6 22 …