Menu Analysis

KOLEJ ANTARABANGSA GENTING INTI

By

Sheikh Mehmood Faisal

04/10/23 HTS 2

References

Restaurant Management: Customers, operations, and employees / Menu Scoring & Menu Engineering.

Profitable menu planning / Menu Analysis.

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Objectives

By the completion of this presentation you should be able to: Analyze a menu for profitability Apply menu engineering to menu analysis Apply menu scoring methods to menu analysis.

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Important Terms

Menu engineering Plowhorses Puzzles Stars Dogs

Menu scoring Placement Pricing

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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. Must be profitable in terms of individual item profitability

2. Most profitable item must be selling the best.

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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 entrée as to its profitability (gross profit) and its sales. It then combines these measurements and places each menu item into one of four classifications.

Plow Horse

Dog

PuzzleStar

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Contributing Margin

Determine the contributing margin (CM) of each item

CM same as item’s Gross Profit Use total food cost (include garnish,

accompaniments served with entrée such as salad, potatoes, rolls, butter etc.).

Selling Price – Food Cost = Contributing Margin

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Contribution MarginRinggit vs. Food Cost Percentage

Steak Dinner Fish Sandwich Coffee

Selling Price RM 15.00 RM 4.00 RM 0.75

Cost RM 7.50 RM 1.00 RM 0.15

Food Cost % 50% 25% 20%

Cont. Margin $ RM 7.50 RM 3.00 RM 0.60

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(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 RM 9.95 35 RM 646.75 RM 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

285 RM 3,177.75 RM 1,173.43

(7) Food Cost Percentage: (6) / (5) = (8) Total Contribution to Margin: (5) – (6) =(9) Average Contribution Margin/ Customer: (8) / (2) =(10) Contribution Margin per menu Item: (5) – (6)

(2)

(10)

C/M

RM 6.47

7.41

7.07

7.12

Menu Engineering

36.92%

RM 2,004.32Rm 7.03

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Menu Engineering

(11) Average Popularity80% of the average item sales per entrée: 100 / 4 X 80% = 20%

(12) Popularity of each menu item:Number of portions sold divided by total number of meals soldChicken: 65 / 285 = 22.8%Beef: 75 / 285 = 26.3%Turkey: 90 / 285 = 31.6%Filet: 55 / 285 = 19.3%

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Menu Engineering AnalysisPlowhorse

*Chicken (6.47/22.8%)

Star

*Turkey (7.07/31.6%)

*Beef (7.4126.3%)

Dog

*Filet (7.12/19.3%)

Puzzle

100%

20%

Popularity

0 Contribution Margin 7.03 8

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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

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Menu Engineering AnalysisPlowhorse

*Chicken (6.47/22.8%)

Star

*Turkey (7.07/31.6%)

*Beef (7.4126.3%)

Dog

*Filet (7.12/19.3%)

Puzzle

100%

20%

Popularity

0 Contribution Margin 7.03 8

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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.

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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.

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(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

Total 285 $3,177.75 $1,173.43

7) Meal Check Average: 5 / 2 = 8) Gross Profit: 5 – 6 =9) Gross Profit %: 8 / 5 =10) Gross Profit Average Meal: 7 x 9

=11) Total Meals Served:12) Popularity of Meals Analyzed: 2 / 11 =13) Menu Score: 10 x 12 =

$11.15$2,004.32

63%$7.02

45063%4.42

Menu Scoring

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The Higher the Score the More Profitable the Menu

This method takes into account not only # of items sold, but also their contributing profit

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Placement

Two Schools of thought

1. Menu Sequence Menu should follow progression of meal

2. Focal Points Use focal points on the menu to push certain

menu items

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Focal Points

Focal Point

Focal Point

Single Sheet Menu Twofold Menu

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Focal Points

2

3

4

5

Focal Point

Threefold Menu

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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.

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Branding

Fast Food Coke / Pepsi TGIF Jack Daniels

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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

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Price Placement

Baked Chicken……….$8.99

Lemon Sole………….$11.99

Lamb Steak………….$12.99

Swordfish Steak…..…$14.99

BAKED CHICKENTender pieces of chicken breast

$8.99

LEMON SOLEFresh filets sautéed with lemon caper sauce

$11.99

LAMB STEAK Center cut of lamb served on a bed of rice

$12.99

SWORDFISH STEAKCharcoal grilled served with beurre blanc

$14.99

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Price Placement

BAKED CHICKENTender pieces of chicken breast

baked to perfection - 11.95

LEMON SOLEFresh filets sautéed with lemon caper sauce

& rice pilaf – 11.95

LAMB STEAK Center cut of lamb served on a bed of rice

pilaf - 12.95

SWORDFISH STEAKCharcoal grilled served with beurre

blanc sauce– market price

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Price Placement

BAKED CHICKENTender pieces of chicken breast

Eight dollars and ninety nine cents

LEMON SOLEFresh filets sautéed with lemon caper sauce

Eleven dollars and ninety nine cents

LAMB STEAK Center cut of lamb served on a bed of rice

Twelve dollars and ninety nine cents

SWORDFISH STEAKCharcoal grilled served with beurre blanc

Fourteen dollars and ninety nine cents

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Conclusion

Menu analysis is important If demographic studies, internal capacities, cost cards, and

markups have been executed correctly, the score should be a good one

Analysis should be done using either the Smith or the Hurst methods to ascertain the profitability of the menu

If the analysis shows a poor menu, make improvements Good menu: first step has been taken toward running a

profitable operation. It’s just that simple