Part Three: Making Adjustments

While there are many resources available for engineering a menu, the following list from an internet search is representative of a majority of menu engineering strategies.

• Removing menu items that are less profitable or popular
• Adjusting the price of menu items to increase profit margins
• Editing dollar signs and decimals to avoid price sensitivity
• Featuring popular menu items by adding a graphic or bolding the item
• Adding more enticing descriptors for menu items
• Keeping eye movements in mind when placing menu items
• Limit the number of options to avoid overwhelming guests with choices
• Limit length or number of panels making the menu

These adjustments can provide many benefits, starting with categorizing menu items based on contribution margin and sales mix to:

• Improve profit margins
• Implement cost management
• Reduce food waste
• Maintain food freshness
• Enhance customer experience

Industry Examples

The following industry cases have been documented.

1. The Cheesecake Factory
   • Item Placement: The Cheesecake Factory uses a multi-page menu with high-margin items strategically placed in the center and top-right sections, where customers’ eyes naturally gravitate.
   • Descriptive Labels: Cheesecake uses detailed and appetizing descriptions to make dishes more appealing, which tends to increase sales.
2. McDonald’s
   • Menu Simplification: McDonald’s has streamlined its menu to focus on high-margin items like the Big Mac and Chicken McNuggets. This simplification helps reduce operational complexity while improving profitability.
   • Value Meals: By bundling items into value meals, McDonald’s increases the average check size while offering perceived value to customers.
3. Panera Bread
   • Healthy Options: Panera Bread highlights healthier, high-margin items with call-out boxes and special sections.
   • Menu Layout: Placement not only caters to health-conscious customers but also boosts profitability.
   • Seasonal Items: Panera introduces seasonal items that are often high-margin and limited-time offers (LTO) creating a sense of urgency and exclusivity.
4. Olive Garden
   • Menu Layout: Olive Garden uses a three-panel menu layout, placing high-margin items at the top and bottom of each section. This layout helps guide customers’ choices towards more profitable dishes.
   • Upselling: Olive Garden trains its staff to upsell items like appetizers, desserts, and drinks, which are typically high margin items.
5. Chipotle
   • Customization: Chipotle’s menu allows for customization, which can lead to higher average check sizes. Customers often add extra ingredients, increasing the overall profitability of each order.
   • Visual Appeal: Chipotle uses clear and simple menu boards with high-contrast colors to make high-margin items stand out.
6. Starbucks and Tim Hortons
   • Known for its strategic placement of seasonal and high-margin items, Starbucks uses ME to highlight new and popular drinks
   • By analyzing customer preferences and profitability, Tim Hortons adjusts its menu to highlight popular and profitable items

Summary

Menu engineering is a strategic approach used in the restaurant industry to design and optimize a menu for optimal profitability. Menu engineering strategies involve analyzing sales data and item food costs to determine which menu items are both popular and profitable. Menu engineering requires management to orient itself to the number of dollars a menu contributes to profit, not merely to monitoring cost percentages. The power of menu engineering resides in an analysis of input data while providing important output to operators. The three mandatory components of menu engineering are:

• Item Categorization: menu items categorized by sales volume and profitability.
• Cost and contribution margin calculations are critically important
• Optimization: based on the analysis, adjustments are made to pricing, menu placement, and descriptors to influence customer choice and operational profitability.

By Michael L. Kasavana, Ph.D., CHTP, CFTP, MSU Professor, Emeritus, AHLEI Author of the Eleventh Edition of Managing Front Office Operations.