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Menu engineering is both an art and a science, but it’s the science part that usually trips up most restaurant operators. Here’s how to gather the right data so the science of designing optimized menus becomes easier.
Many restauranteurs argue that the term “menu engineering” has more to do with menu design, layout and customer psychology than anything else. Others argue that menu engineering is less about layout and colors and more about item pricing and profitability. Both would be right, because menu engineering is truly an art and a science. Where there’s no argument is that the most successfully engineered menus have a positive impact on sales and profitability.
Where to begin?
The first step with engineering an optimized menu is always the same: You need to work with the right data.
Follow these guidelines to ensure your data set includes these attributes for each menu item:
1. Transaction level detail:
The number of times each menu item was sold, and how much money each item sold for, at every restaurant the menu item is available. A defined date range is important too. The longer a timeframe for the data, the better. This way, you can compare pricing and sales against previous periods.
2. Ingredient Costs:
Ingredient cost for each menu item will determine its profitability. Remember that all costs must be calculated and reported in the same way across all your restaurants to get a truly accurate cost.
3. Menu Segmentation:
Categories such as entrees, appetizers and desserts or subcategories such as breakfast, lunch or dinner will allow you to compare like items. Just like food ingredient costing, menu segment categories must be consistent across the entire data set so that the results of the analysis will be useable.
The core aspects of “science-side” menu engineering are analyzing customer demand, percentage sales contributions, ingredient costs and profit margins while easily identifying your most (and least) profitable menu items. Where do you find the data to make these calculations?
A quality business intelligence and analytics tool will do all of the heavy lifting. The best restaurant systems will access a comprehensive data warehouse pre-populated with all the data (and a lot more) mentioned above. This data is accumulated and driven by your integrated enterprise back office solution.
Now, take your findings and head over to your marketing department armed with information about the most popular and profitable items for a new and smartly engineered menu design!