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9 ways to maximize menu profitability

Break down which menu items support financial goals

Dora Furman (left) is vice president of consulting services at Revenue Management Solutions. This article does not necessarily reflect the opinions of the editors or management of Nation’s Restaurant News.

Too often, restaurant menus have catchy descriptions, gorgeous photos and an attractive layout, but are missing a key ingredient: They aren’t driving profitability.

Certainly, you should have a visually appealing menu that matches your restaurant’s brand. But beyond doing that well, it’s important to use the menu to your advantage financially.

By using key performance metrics, both financially (such as product mix and profitability) and operationally (such as speed of service, quality and SKU utilization), you can better understand what items are good candidates for menu features, deletion or product re-engineering. This approach also takes emotions out of the picture. 

With this in mind, here are nine tips to help maximize your menu:

1.     First and foremost, take stock of your current menu offerings. Use point-of-sale data to understand demand for items and how the product’s volume compares to its overall profitability (price less theoretical food cost). 

2.     Promote and feature items that are profitable and wide-reaching. For example, a profitable item that has a polarizing taste profile may never become highly popular, even if it’s pictured on the menu. 

3.     In addition to customer reach, ensure that the product can be executed easily (speed of service) and consistently (quality). And, more importantly, it needs to be something that embodies and represents your brand. This may be the first experience for that guest, and it may be your only chance to convert that guest to a regular user.

4.     Ensure that highlighted items — dishes featured with a photo or other call-outs such as boxes, symbols and/or different fonts — represent a wide variety of offerings. You don’t want to highlight only the most profitable items if it means the items are your higher-priced items in each section, and whose recipes consist of a similar protein. As an example, don’t picture the chicken wings, grilled chicken sandwich and fried chicken platter on the same menu, unless of course you are a restaurant that only offers chicken.

5.     Besides directly highlighting products through pictures, fonts and symbols, you can influence guests to purchase certain items through proper placement on your menu. Depending on your menu design, certain areas are more likely to drive an item’s purchase. For example, on a postcard menu, the first and last spot in a section is more likely to encourage the purchase of an item.

6.     Consider reducing the size of the menu through deletion of items that are less profitable and consistently sell less than other items. Additional considerations should include whether the item lags in operational areas such as speed of service and guest satisfaction, or if the item serves a specific purpose for the brand, providing a veto vote item, such as vegetarian pasta.

7.     Loyalty thrives on meeting expectations of a consistent guest experience, which not only includes product quality and taste, but the brand identity that encompasses such elements as menu design. While menu refreshes and design changes are important over time, guests may become confused and question the stability of the brand if changes occur too frequently. And this could lead to a decline in transactions. Prior to making changes to content and design, consider testing to fully understand the financial implications, especially for multi-unit brands. 

8.     The use of daily specials can help showcase a chef’s creativity and promote local and seasonal flavors, while also utilizing leftover or surplus ingredients. Ensure that these items are priced appropriately. If your front-of-house staff is trained to upsell a special, ensure that it drives profitability. The product’s profit needs to be equal or greater than other similar products that your guests may ultimately trade from.

9.     Finally, don’t focus only on how the printed menu looks. Take an equal amount of care with how your menu looks on laptops, tablets and phones. Some restaurants overly crowd their menus on those applications: For these channels, less can be more in terms of graphics and visual elements. 

As you consider these tips, it’s helpful to get the help of experts internally or externally who understand your customers’ behavior. With the richness of your transactional level data, you can learn a lot about purchase behavior and make decisions that drive your brand’s profitability.

Dora Furman, vice president of consulting services at Revenue Management Solutions, directs the company’s work for multi-national brands in the quick-service, casual-dining and fine-dining segments. Prior to joining RMS, she worked as a CPA at PwC and a financial analyst supporting the sales team at PepsiCo.

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