What is restaurant menu analysis?

What is restaurant menu analysis?

Menu analysis involves a series of steps to identify the profitability and popularity of each item on a restaurant’s menu. This strategy enhances sales and, ultimately, the success of the establishment as Christian Salloum, founder and managing director of BrandPortunity Consulting, explains.

Armed with impressive credentials and F&B retail service experience spanning the Middle East and North Africa, Christian Salloum pursued a dream he had been nurturing since the age of 17, launching his own restaurant and catering consultancy. BrandPortunity, like the name suggests, is a mixture between “brand” and “opportunity.” The company is a testament to Salloum’s creativity, success and positivity, mirroring the opportunities and solutions that he has shaped over the years and the brands that he has strengthened with his knowledge and determination. HN sat with the foodpreneur to learn more about BrandPortunity.

Restaurant menu analysis is a broad term that considers each element of a menu: the copy, fonts and design of the menu, the mix of ingredients in the dishes and the beverages on offer. The analysis is an ongoing process that should be conducted regularly throughout the year. You need to have an in-depth understanding of your restaurant as well as performance metrics, such as gross profit or margins, costs of goods sold and sales volume. Unfortunately, many restaurateurs don’t make time to review and analyze their menus. This may be detrimental to their business and overall success.

How can menu analysis boost sales?
Menu engineering is typically the responsibility of the restaurant operator and the managers in charge.
The term “menu engineering” encompasses all of the details and duties that bind your menu’s pricing, design and offerings. It’s a qualitative and a quantitative exercise that calls on you to understand your most profitable and popular items, strategically placing them on your menu with enticing descriptions. Menu engineering is more advanced than menu analysis; it’s about taking action to achieve better margins and profit.
You might think that menu engineering is tedious. When completed correctly, it provides fascinating insights into your business and dramatically increases your sales by an average of 20 percent. Understanding your customers’ wants and needs and your ability to adapt will yield an impressive return on investment.

Understanding your competitors
Understanding your pricing and markup strategy and those of your direct competitors will help you set accurate price points for all of your food and beverage items. For example, if after completing your menu analysis you realize that you have the cheapest (or most expensive) burger in town, you can make price adjustments to sell more or improve your margins. If you plan to increase the price, just ensure that you are still competitive. Alternatively, you can work on your brand. You might be operating a high-end restaurant that offers specialty burgers and wish to keep the higher price to differentiate your product.

Cost margins to help analyze profitability
Without profit, a restaurant either loses money or breaks even. Neither keeps its doors open for long. Analyzing a menu can help you understand which items contribute to your profit and which do not. Once you understand the profitability of each menu item, you can develop the correct pricing strategies for a better engineered menu.
A term that is popular in menu engineering is “plough horse,” otherwise known as a “cash cow,” which refers to menu items that are high in popularity but low in profitability. It’s essential to identify these items in this category so that you can amend your pricing, alter the portion size or change the ingredients to increase your profitability.
A restaurant is as much a business as a bank, software provider, factory or construction company. Therefore, it is imperative that all restaurant and business owners prioritize their menu analysis to fully grasp the cost of goods, markups of every item on the menu, product mix and brand. It is, after all, part of the job description.

Christian Salloum
Managing Director
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