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Restaurant inventory: How Menu Engineering Can Boost Your Profits

- March 01, 2021 Written By: Krista Dinsmore

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The menu in your restaurant is not only your most effective sales and marketing tool, it can also boost how profitable your business is when strategically designed in conjunction with restaurant inventory analytics.

Any menu should align with your brand and restaurant theme, as that’s an important aspect of enticing customers into your restaurant. Yet your restaurant’s menu is way more powerful than just attracting customers.

A restaurant menu should be strategically designed for greater profits. 

To design a menu that promotes restaurant profitability, restaurant owners and managers should regularly undertake menu engineering - which informs how you design your menu and how much you charge for each item.

 

What is menu engineering?

Menu engineering is a strategy that involves analyzing sales data and food costs to determine which dishes to include on your menu for maximum profit. The use of restaurant inventory data is used to categorize menu items based on their popularity and profitability. 

The goal of menu engineering is simple, to increase the profitability of your restaurant.

Once you have categorized your most popular and profitable products by evaluating your restaurant inventory data, menu engineering then makes use of menu psychology to guide the content and design of your menu for profitability.

Why restaurant inventory data should guide your menu engineering plan

Menu engineering requires a deep understanding of your restaurant inventory and the use of a restaurant inventory management system to fully understand menu item prices, food costs per serving and contribution margin.

Gathering this data for a set period of time will allow your restaurant to categories menu items. Menu engineering is based on four category groups.

Menu Engineering Category Groups

  1. Stars: These are high profit, high popularity items that are the stars of your restaurant’s menu.
  2. Puzzles: High profit, low popularity items that should be more prominent on your menu, upsold by your waiting staff or lowered in price to improve popularity.
  3. Plow horses: These are low profit, high popularity items that you could either raise menu prices or lower ingredients costs to make them more profitable.
  4. Dogs: These are the low profit and low popularity items that should be either rethought or removed from your menu. 

Design your menu with your item categories in mind

Once you have categorized your menu items with in-depth analysis of how much you are spending on inventory products and how profitable your dishes are, you can then redesign your menu.

Here are some tips that can help your restaurant redesign your menu to focus on profitability:

Highlight the items that fall under the stars and puzzles category

Your “stars” and “puzzles” categories are your most profitable menu items. That’s why you should draw your customers towards them through the design and layout of your menu. This could include placing a box around them, writing phrases such as “Chef’s Special” or “Popular” next to them or printing them in a different colour.

Remember, the more items that you highlight on your menu with visual cues the less of an impact these cues will have on your customer. Try to keep this tactic down to a minimum, reserving it for the few items that will improve your profitability the most.

Use menu descriptions to set items apart

To ensure your most profitable items appear important, use the item description to reflect their importance. Writer longer descriptions for your most profitable items, and use descriptive and evocative words that set them apart from the other items on your menu. 

Keep eye movement patterns in mind

Customers' eyes tend to focus on certain areas of a menu depending on its design, so put your most profitable items in this space - although try to avoid putting super expensive items here as this may make your restaurant seem too expensive.

 Here are the areas of most attention for different menu designs:

  • One panel menu: Customers’ eyes focus on the top of the page.
  • Two-panel menu: Customers’ eyes focus on the top of the right-side panel.
  • Three-panel book style menu: Customers’ eyes focus on the top of the third panel.
  • Many panels: Customers’ eyes focus on the top of each page.

Want to learn more about combining restaurant inventory management with menu engineering to boost your profits? Contact sculpture Hospitality today. We would love to talk to you about how our restaurant inventory management software solutions can help. 

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