Menu Engineering
Mark S. Elliott has spent 25 years working in various management roles within the tenanted and leased divisions of the UK's largest breweries and pub companies. His extensive knowledge and day-to-day involvement with pubs and publicans make him well qualified to know what is required to run a successful pub. He shares his knowledge and many 'insider tips' with you in this book. Mark is based in Cockermouth, Cumbria.
MENU ENGINEERING
Menu engineering is a way of analysing your menu and making changes in order to maximise the profitability of your food operation. It examines the sales history of each dish and the gross profit it contributes. It then relates the profit margin to the popularity of the dish to see which items are both popular and profitable.
Though it is usually undertaken by the larger food operators, some menu engineering techniques are useful to the pub food operator.
A fictional example is given on page 270 for a range of pizza dishes:
Explanation of the table
35% of all pizzas sold are cheese pizzas and they contribute £ 3.76 gross profit per pizza. 5% of pizzas sold are ‘Jumbo specials’ and they contribute £ 4.10 per pizza. The average sales percentage is 14.3% (ie 100% divided by the number of dishes – 7 types of pizza), and the average gross profit is £ 3.16 (ie total gross profit of each pizza divided by the number of dishes.) These figures are then used as a benchmark to assess the profitability and popularity of each pizza dish.
‘The Barking Dog’ – pub pizza sales % and gross profit |
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Pizza type |
Sales percentage (sales as a percentage of total pizza sales) |
Gross profit (£) per pizza |
Cheese |
35.0% |
£ 3.76 |
Seafood special |
14.2% |
£ 2.50 |
Spicy chicken |
9.2% |
£ 2.74 |
Jumbo special |
5.0% |
£ 4.10 |
Tuna |
10.6% |
£ 2.89 |
Beef |
15.0% |
£ 2.25 |
Super deluxe |
11.0% |
£ 3.86 |
Average: |
14.3% |
£ 3.16 |
Dishes are placed into four categories according to their profitability and popularity. Using a useful US menu engineering model, these categories are given memorable names.
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Stars are high in both popularity and profit margin. These are the Signature Items. |
These dishes should have prime place on your menu and be promoted by staff to further improve your overall profitability. Other than finding ways to reduce the recipe cost of these items (increasing dish gross profit further), they should be left alone. |
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Examples (using fictional data from previous table): Cheese pizza |
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Plough horses are high in popularity but low in profit margin. Price-sensitive. |
These dishes are typically very price-sensitive and sometimes used as ‘loss leaders’. They can be pushed into the ‘star’ category by improving profit margins by reducing recipe cost. |
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Examples: Beef pizza |
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Puzzles are low in popularity but high in profit margin. Higher in profit per sale but hard to sell. |
Typically the more expensive dishes on a menu. May act as ‘image makers’ but too many of these dishes should be avoided. Price reductions may be a way of improving popularity but must be carefully assessed. Otherwise candidates for repackaging, replacing or elimination. |
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Examples: Jumbo and Super deluxe pizzas. |
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Dogs are low in popularity and low in profit margin. Unpopular and little profit. |
Possible candidates for elimination, repackaging, repricing or replacing. However, these dishes may serve a particular market segment such as kids’ menus and need to remain in place to be competitive. |
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Examples: Spicy chicken. |
