Menu Analysis & Engineering HRT383 Lunch Fall 08

Menu Analysis & Engineering

HRT383

Lunch Fall 08

04/18/23 HRT383 2

References

Mill, Robert Christie (1998) Restaurant Management: Customers, operations, and employees / Menu Scoring & Menu Engineering, pp 114-116. Upper Saddle River, N.J. : Prentice Hall.

Drysdale, John A. & Jennifer Adams Aldrich (2002). Profitable menu planning / Chapter 5: Menu Analysis, pp. 101-115. 3rd ed. Upper Saddle River, N.J. : Prentice Hall, TX911.3.M45 D79 2002

CD-ROM TX911.3.M45 D79 2002

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Objectives

By the completion of this presentation you should be able to: Analyze a menu for profitability Apply menu engineering to menu analysis Price menu items Locate menu items on a menu.

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Important Terms

Menu engineering Plowhorses Puzzles Stars Dogs

Menu Placement Pricing

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Introduction

This presentation explains how to evaluate a menu

When measuring a menu to see if it is successful 2 criteria must be met to declare it a winner:

1. Must be profitable in terms of individual item profitability

2. Most profitable item must be selling the best.

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Stars, Plowhorses, Puzzles, & Dogs

Method, called menu engineering, developed by Donald Smith Ph.D., Westin Hotels Distinguished Professor at Washington State University

This method rates the menu by measuring each entrée as to its profitability (gross profit) and its sales. It then combines these measurements and places each menu item into one of four classifications.

Plow Horse

Dog

PuzzleStar

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Contributing Margin

Determine the contributing margin (CM) of each item

CM same as item’s Gross Profit Use total food cost (include garnish,

accompaniments served with entrée such as salad, potatoes, rolls, butter etc.).

Selling Price – Food Cost = Contributing Margin

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Contribution MarginDollars vs. Food Cost Percentage

Sirloin Pasta Coffee

Selling Price $22.00 $18.00 $2.00

Cost $10.36 $4.54 $0.19

Food Cost % 47.09% 25.22% 9.5%

Cont. Margin $ $11.64 $13.46 $1.81

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Contribution MarginDollars vs. Food Cost Percentage

Sirloin Pasta Coffee

Selling Price $22.00 $18.00 $2.00

Cost $10.36 $4.54 $0.19

Food Cost % 47.09% 25.22% 9.5%

Cont. Margin $ $11.64 $13.46 $1.81

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Data Trap Fall ‘08

See Lunch Hand Out

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Desserts

Menu Plate F/C Contri-bution

Quan-tity Net Total

Popu-larity Menu

MENU ITEM Price Cost % Margin SoldIncom

e Cost Engineering

RKR Apple Crisp 5.00 0.70 14.00% 4.30 58 290.00 40.60 46.40%

Sampler 5.00 0.84 16.80% 4.16 18 90.00 15.12 14.40%

Choc Bread Pudding 5.00 1.12 22.40% 3.88 32 160.00 35.84 25.60%

Mngr Special 5.00 1.12 22.40% 3.88 17 85.00 19.04 13.60%

TOTAL DESSERTS 17.7% 4.12 125 6.25110.6

0

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Popularity

Average Popularity

80% of the average item sales per Dessert:

100 / 4 X 80% = 20%

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Desserts


Quan-tity Net Total

Popu-larity Menu


e Cost Engineering

RKR Apple Crisp 5.00 0.70 14.00% 4.30 58 290.00 40.60 46.40%

Sampler 5.00 0.84 16.80% 4.16 18 90.00 15.12 14.40%


Mngr Special 5.00 1.12 22.40% 3.88 17 85.00 19.04 13.60%

TOTAL DESSERTS 17.7% 4.12 125 6.25110.6

0 20%

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HRT383 Lunch DessertsPlowhorse

Star

Dog

Puzzle

100%

20%

Popularity

0 Contribution Margin $4.12

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* Choc BP $3.88/25.60%

Star

* Apple Crisp $4.30/46.40%

* Mngr Special $3.88/19.04%

Dog

* Sampler $4.16/14.4%

Puzzle

100%

20%

Popularity


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Desserts


Quan-tity Net Total

Popu-larity Menu


e Cost Engineering

RKR Apple Crisp 5.00 0.70 14.00% 4.30 58 290.00 40.60 46.40% Star

Sampler 5.00 0.84 16.80% 4.16 18 90.00 15.12 14.40% Puzzle


PlowHorse

A la CarteMngr Special 5.00 1.12 22.40% 3.88 17 85.00 19.04 13.60% Dog

TOTAL DESSERTS 17.7% 4.12 125 6.25110.6

0 20%

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The Four Key Menu Categories

Plowhorses are items that are relatively popular but have a high contribution margin. Items in this category can have their menu prices increased or the portion size cut in a attempt to increase CM. If market is price resistant

Stars have both high popularity and high CM Puzzles have relatively low popularity and high

margins; lower price. Dogs are both low in popularity and CM; eliminate

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* Choc BP $3.88/25.60%

Star

* Apple Crisp $4.30/46.40%

* Mngr Special $3.88/19.04%

Dog

* Sampler $4.16/14.4%

Puzzle

100%

20%

Popularity


Increase $ Cut Portion ?

Eliminate?

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* Apple Crisp $2.98/44.83%

Star

* Crème Brulee $4.55/22.76%

* Sampler $3.29/18.62% * Choc BP $3.30/13.79%Dog

Puzzle

100%

20%

Popularity


Increase $ Cut Portion ?

Eliminate?

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Menu Plate Contributi

on

Quantity Net Total Popularity Menu

MENU ITEM Price Cost % Margin Sold Income Cost Engineering

Asian Salad w/ Chix 10.00 3.67 36.70% 6.33 17 170.00 62.39 5.25% 5.56%

Asian Salad 8.00 2.23 27.88% 5.77 1 8.00 2.23 0.31%

SouthWestern Salad 10.00 2.95 29.50% 7.05 24 240.00 70.80 7.41%

Cobb Salad 10.00 1.94 19.40% 8.06 16 160.00 31.04 4.94%

Caesar Salad 8.00 0.61 7.63% 7.39 2 16.00 1.22 0.62% 3.40%

Caesar Salad with Chicken 10.00 1.26 12.60% 8.74 6 60.00 7.56 1.85%

Caesar Salad with Shrimp 10.00 3.49 34.90% 6.51 3 30.00 10.47 0.93%

Cheese Quesadilla 8.00 3.25 40.63% 4.75 16 128.00 52.00 4.94% 16.98%

Quesadilla with Chicken 10.00 3.90 39.00% 6.10 25 250.00 97.50 7.72%

Quesadilla with Shrimp 10.00 6.13 61.30% 3.87 14 140.00 85.82 4.32%

Veggie Sandwich 7.00 1.36 19.43% 5.64 20 140.00 27.20 6.17%

Burger 9.00 2.89 32.11% 6.11 31 279.00 89.59 9.57% 18.52%

Burger - Cheese 10.00 2.99 29.90% 7.01 8 80.00 23.92 2.47%

Burger - Bacon 10.00 3.09 30.90% 6.91 5 50.00 15.45 1.54%

Burger - Cheese & Bacon 11.00 3.19 29.00% 7.81 16 176.00 51.04 4.94%

Turkado 8.00 2.56 32.00% 5.44 38 304.00 97.28 11.73%

Spaghetti 9.00 1.80 20.00% 7.20 18 162.00 32.40 5.56% Mahi Mahi 12.00 5.90 49.17% 6.10 37 444.00 218.30 11.42%

Steak 14.00 7.24 51.71% 6.76 27 378.00 195.48 8.33%

SUBTOTAL MAIN DISHES 36.44% 6.31 324

3215.00

1171.69

Lunch Main Courses

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Popularity

Average Popularity

80% of the average item sales per Main Dishes:

100 / 11 X 80% = 7.27%

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on




Asian Salad 8.00 2.23 27.88% 5.77 1 8.00 2.23 0.31%


Cobb Salad 10.00 1.94 19.40% 8.06 16 160.00 31.04 4.94%

Caesar Salad 8.00 0.61 7.63% 7.39 2 16.00 1.22 0.62% 3.40%






Veggie Sandwich 7.00 1.36 19.43% 5.64 20 140.00 27.20 6.17%

Burger 9.00 2.89 32.11% 6.11 31 279.00 89.59 9.57% 18.52%

Burger - Cheese 10.00 2.99 29.90% 7.01 8 80.00 23.92 2.47%

Burger - Bacon 10.00 3.09 30.90% 6.91 5 50.00 15.45 1.54%


Turkado 8.00 2.56 32.00% 5.44 38 304.00 97.28 11.73%


Steak 14.00 7.24 51.71% 6.76 27 378.00 195.48 8.33%


3215.00

1171.69 7.27%

Lunch Main Courses

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Exercise

Please work with your fellow students and come up with suggestions/decisions.

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HRT383 Lunch Main CoursesPlowhorse

Star

Dog Puzzle

100%

7.27%

Popularity


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on




Asian Salad 8.00 2.23 27.88% 5.77 1 8.00 2.23 0.31%


Cobb Salad 10.00 1.94 19.40% 8.06 16 160.00 31.04 4.94%

Caesar Salad 8.00 0.61 7.63% 7.39 2 16.00 1.22 0.62% 3.40%






Veggie Sandwich 7.00 1.36 19.43% 5.64 20 140.00 27.20 6.17%

Burger 9.00 2.89 32.11% 6.11 31 279.00 89.59 9.57% 18.52%

Burger - Cheese 10.00 2.99 29.90% 7.01 8 80.00 23.92 2.47%

Burger - Bacon 10.00 3.09 30.90% 6.91 5 50.00 15.45 1.54%


Turkado 8.00 2.56 32.00% 5.44 38 304.00 97.28 11.73%


Steak 14.00 7.24 51.71% 6.76 27 378.00 195.48 8.33%


3215.00

1171.69 7.27%

Lunch Main Courses

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on




Asian Salad 8.00 2.23 27.88% 5.77 1 8.00 2.23 0.31%


Cobb Salad 10.00 1.94 19.40% 8.06 16 160.00 31.04 4.94%

Caesar Salad 8.00 0.61 7.63% 7.39 2 16.00 1.22 0.62% 3.40%






Veggie Sandwich 7.00 1.36 19.43% 5.64 20 140.00 27.20 6.17%

Burger 9.00 2.89 32.11% 6.11 31 279.00 89.59 9.57% 18.52%

Burger - Cheese 10.00 2.99 29.90% 7.01 8 80.00 23.92 2.47%

Burger - Bacon 10.00 3.09 30.90% 6.91 5 50.00 15.45 1.54%


Turkado 8.00 2.56 32.00% 5.44 38 304.00 97.28 11.73%


Steak 14.00 7.24 51.71% 6.76 27 378.00 195.48 8.33%


3215.00

1171.69 7.27%

Lunch Main Courses

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on




Asian Salad 8.00 2.23 27.88% 5.77 1 8.00 2.23 0.31% PUZZLE /DOG

SouthWestern Salad 10.00 2.95 29.50% 7.05 24 240.00 70.80 7.41% PUZZLE

Cobb Salad 10.00 1.94 19.40% 8.06 16 160.00 31.04 4.94% PUZZLE

Caesar Salad 8.00 0.61 7.63% 7.39 2 16.00 1.22 0.62% 3.40%

Caesar Salad with Chicken 10.00 1.26 12.60% 8.74 6 60.00 7.56 1.85% PUZZLE



Quesadilla with Chicken 10.00 3.90 39.00% 6.10 25 250.00 97.50 7.72% PLOW HORSE


Veggie Sandwich 7.00 1.36 19.43% 5.64 20 140.00 27.20 6.17% DOG

Burger 9.00 2.89 32.11% 6.11 31 279.00 89.59 9.57% 18.52%

Burger - Cheese 10.00 2.99 29.90% 7.01 8 80.00 23.92 2.47% STAR

Burger - Bacon 10.00 3.09 30.90% 6.91 5 50.00 15.45 1.54%


Turkado 8.00 2.56 32.00% 5.44 38 304.00 97.28 11.73% PLOW HORSE

Spaghetti 9.00 1.80 20.00% 7.20 18 162.00 32.40 5.56% PUZZLE Mahi Mahi 12.00 5.90 49.17% 6.10 37 444.00 218.30 11.42% PLOW HORSE

Steak 14.00 7.24 51.71% 6.76 27 378.00 195.48 8.33% STAR


3215.00

1171.69 7.27%

Lunch Main Courses

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The Four Key Menu Categories

Plowhorses are items that are relatively popular but have a high contribution margin. Items in this category can have their menu prices increased or the portion size cut in a attempt to increase CM. If market is price resistant

Stars have both high popularity and high CM Puzzles have relatively low popularity and high

margins; lower price. Dogs are both low in popularity and CM; eliminate

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Main CoursesMENU ITEM Menu Engineering Recommendation

Asian Salad w/ Chix PUZZLE/DOG Lower $?/Eliminate

SouthWestern Salad PUZZLE Lower $?

Cobb Salad PUZZLE Lower $?

Caesar Salad PUZZLE Lower $?

Quesadilla (Chix & Schrimp) PLOW HORSE

Increase Menu $ or Reduce Portion

Veggie Sandwich DOG Eliminate

Burger (Cheese & Bacon) STAR

Turkado PLOW HORSEIncrease Menu $ or

Reduce Portion

Spaghetti PUZZLE Lower $?

Mahi Mahi PLOW HORSEIncrease Menu $ or

Reduce Portion

Steak STAR

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Up Selling

Manager’s Special

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Placement

Two Schools of thought

1. Menu Sequence Menu should follow progression of meal

2. Focal Points Use focal points on the menu to push certain

menu items

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Focal Points

Focal Point

Focal Point

Single Sheet Menu Twofold Menu

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Focal Points

2

3

4

5

Focal Point

Threefold Menu

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Specials

Larger Bolder type than the rest of menu Longer description Concept of Closure

people’s eyes are drawn to what ever is enclosed by a box

Color, illustration, and/or pictures, bullets can be used to draw attention to signature items.

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Branding

Fast food Coke / Pepsi TGIF Jack Daniels

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Menu Pricing

Odd-Cents pricing Majority of prices end in either a “5” or a “9”

Price rounding. Within certain price bands, price increases have

little negative impact on customers

Placement

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Price Placement

Baked Chicken……….$8.99

Lemon Sole………….$11.99

Lamb Steak………….$12.99

Swordfish Steak…..…$14.99

BAKED CHICKENTender pieces of chicken breast

$8.99

LEMON SOLEFresh filets sautéed with lemon caper sauce

$11.99

LAMB STEAK Center cut of lamb served on a bed of rice

$12.99

SWORDFISH STEAKCharcoal grilled served with beurre blanc

$14.99

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Price Placement

BAKED CHICKENTender pieces of chicken breast

Eight dollars and ninety nine cents

LEMON SOLEFresh filets sautéed with lemon caper sauce

Eleven dollars and ninety nine cents

LAMB STEAK Center cut of lamb served on a bed of rice

Twelve dollars and ninety nine cents

SWORDFISH STEAKCharcoal grilled served with beurre blanc

Fourteen dollars and ninety nine cents

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Conclusion

Menu analysis is important If demographic studies, internal capacities, cost cards, and

markups have been executed correctly, the score should be a good one

Analysis should be done using either the Smith or the Hurst methods to ascertain the profitability of the menu

If the analysis shows a poor menu, make improvements Good menu: first step has been taken toward running a

profitable operation. It’s just that simple

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Where to Get More Information

Mill, Robert Christie (1998) Restaurant Management: Customers, operations, and employees / Menu Scoring & Menu Engineering, pp 114-116. Upper Saddle River, N.J. : Prentice Hall.

Drysdale, John A. & Jennifer Adams Aldrich (2002). Profitable menu planning / Chapter 5: Menu Analysis, pp. 101-115. 3rd ed. Upper Saddle River, N.J. : Prentice Hall, TX911.3.M45 D79 2002

CD-ROM TX911.3.M45 D79 2002 Most Menu & F&B Management Books

Documents

Menu Analysis & Engineering HRT383 Lunch Fall 08