Creating and pricing your menu can seem pretty straightforward. But without spending time looking deeper into the costs and rate of sale, you could be losing money and even drive off traffic. That’s why operators use a menu engineering matrix: a way to analyze profitability and popularity to determine how to best menu an item.
The Menu Engineering Matrix
Created in the 80’s, a menu engineering matrix lets you arrange each menu item based how popular it is and how much profit you make from it. The matrix is made of 4 parts on an axis:
“Stars”: High Profit, High Popularity
These are your winning menu items, and often what restaurants are known for. Keep this on your menu and even consider raising the price on your next menu refresh.
“Plow Horses”: Low Profit, High Popularity
These have above-average sales, but aren’t profitable. Think about swapping ingredients or changing the portions to get a better margin. Maybe even increase the menu price.
“Puzzles”: High Profit, Low Popularity
These are profitable, but unfortunately they’re just not selling. So how do you solve the puzzle?Try renaming or adjusting the description, running a promotion, or repositioning it on the menu to catch more eyes. Though it’s very profitable, you can even lower the price. And if none of those strategies work, consider removing it.
“Dogs”: Low Profit, Low Popularity
These are the items you should really think about removing. If they’re not selling and they’re not making you money, it’s a pretty obvious choice.
An exception to keeping “dogs” on the menu might be to have a satisfactory item that a large group can agree on. “If you have a party of six potentially coming in, you don’t want them to choose a different restaurant based on your menu,” says Dan Salem, Founder & Principal of Salem Foodservice Solutions. “Even though this dish isn’t going to be a home run for you, it will at least appeal to all members of the group so they don’t decide to go elsewhere.”
Creating a menu based on this matrix can help you stay profitable and with popular items up and down your menu.
The Matrix in Action
Dan recalls helping a restaurant analyze and rework their menu: “They had a shrimp and pasta dish priced at $15.95, and it cost them probably $3.50—a 22% food cost.”
Based on the menu matrix, Dan suggested a price drop. “[I said] based on your average check and some of your other more popular entrées, why don’t you try featuring this item for $13.50? Then if it’s got legs, maybe consider permanently repricing it.”
After a trial, the restaurant saw the popularity rise while the item still remained profitable. “It ended up going really well. They put the price at $13.50, which was still a 26% food cost.”
A menu engineering matrix is an easy tool with a lot of power behind it. And at a time when costs and pricing can fluctuate weekly, having more control over your customer’s checks has never been more important.
Listen to Dan Salem go into more detail about the menu engineering matrix on his episode of In The Kitchen with Sterling Silver.
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