Even though the customer often only glances at it for a moment, the menu is one of a restaurant’s most important sales tools.
A Gallop survey found that the average customer spends just 109 seconds reading a menu. During this time, they scan the menu, read descriptions and prices, before making a decision.
To make the most of this short time frame, the restaurant menu must be short, clearly organized and thoughtfully presented. And most importantly: every dish and drink on it must be profitable.
To achieve this, restaurateurs are using analytics and menu creation tips to gain insights into how they can configure their menus for both tableside and delivery customers.
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What is menu engineering?
Menu engineering is an approach that involves evaluating a restaurant’s menu prices using sales data and food costs to determine which dishes to feature on the menu and how much to price them. From this data, menu engineering ranks menu items based on their popularity (sales volume) and profitability.
Effectively creating a menu requires knowing the price of each item on the menu, the food cost per serving, and the contribution margin. This allows restaurateurs to rank menu items and see which ones contribute more to profits and which ones contribute less and need to be revised or removed from the menu altogether.
In a nutshell: Menu engineering is a series of operations that ensure that every dish and drink on your restaurant’s menu is profitable, popular, or both.
How to monetize a menu and maximize profits
The time required depends on the number of items offered on the menu. Menu engineering can be divided into five major steps.
Choose a period
Calculate the cost of your menu
Rank menu items based on profitability and popularity
Recompose your menu
Measure the impact of your new menu
1. Choose a period
First of all, you need to choose a time period to analyze. For restaurants that change their menus based on seasonality, it’s a good idea to do this around the time they create their new seasonal menu items. Restaurants that rarely change their menus can revise them less frequently.
Don’t make the mistake of never reviewing your menu prices, though. Food costs change regularly, and your menu prices should reflect these changes. If your food costs increase while your menu prices remain stable, your gross profit margin will decrease and you will earn less from your sales.
