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Menu Analysis & Engineering . HRT383. 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.

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References l.jpg
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

HRT383


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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

HRT383


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Important Terms

  • Menu engineering

    • Plowhorses

    • Puzzles

    • Stars

    • Dogs

HRT383


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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:

    • Must be profitable in terms of individual item profitability

    • Most profitable item must be selling the best.

HRT383


Stars plowhorses puzzles dogs l.jpg

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.

Stars, Plowhorses, Puzzles, & Dogs

Puzzle

Plow

Horse

Star

Dog

HRT383


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Contributing Margin Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • 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

HRT383


Contribution margin dollars vs food cost percentage l.jpg
Contribution Margin Ph.D., Westin Hotels Distinguished Professor at Washington State UniversityDollars vs. Food Cost Percentage

HRT383


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Contribution Margin Ph.D., Westin Hotels Distinguished Professor at Washington State UniversityDollars vs. Food Cost Percentage

Which one will/should your server sell ?

HRT383


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Contribution Margin Ph.D., Westin Hotels Distinguished Professor at Washington State UniversityDollars vs. Food Cost Percentage

Which one will/should your server sell ?

HRT383


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Data Trap Spring ‘06 Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • See Dinner Hand Out

HRT383


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Menu Engineering Ph.D., Westin Hotels Distinguished Professor at Washington State University

(7) Food Cost Percentage: (6) / (5) =

(8) Total Contribution to Margin: (5) – (6) =

(9) Average Contribution Margin/ Customer: (8) / (2) =

(10) Contribution Margin per menu Item: (5) – (6) (2)

25.8%

$1010.27

$6.39

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Popularity Ph.D., Westin Hotels Distinguished Professor at Washington State University

(11) Average Popularity

80% of the average item sales per appetizer:

100 / 5 X 80% = 16%

(12) Popularity of each menu item:

Number of portions sold divided by total number of meals sold

Crab Cake : 38 / 158 = 24.05%

Ceviche : 19 / 158 = 12.03%

J Shrimp: 30 / 158 = 18.99%

G Cheese : 37 / 158 = 23.42%

Ravioli: 34 / 158 = 21.52%

HRT383


Hrt383 dinner appetizers l.jpg
HRT383 Dinner Appetizers Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


Hrt383 dinner appetizers15 l.jpg
HRT383 Dinner Appetizers Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


Hrt383 dinner appetizers16 l.jpg
HRT383 Dinner Appetizers Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


Hrt383 dinner appetizers17 l.jpg
HRT383 Dinner Appetizers Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


Hrt383 dinner appetizers18 l.jpg
HRT383 Dinner Appetizers Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


Hrt383 dinner appetizers19 l.jpg
HRT383 Dinner Appetizers Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


The four key menu categories l.jpg
The Four Key Menu Categories Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • 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

HRT383


Hrt383 dinner appetizers21 l.jpg
HRT383 Dinner Appetizers Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


Hrt383 dinner appetizers22 l.jpg
HRT383 Dinner Appetizers Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


Hrt383 dinner appetizers23 l.jpg
HRT383 Dinner Appetizers Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


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Data Trap Winter ‘06 Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • See Dinner Hand Out for

    • Main Courses &

    • Desserts

HRT383


Exercise l.jpg
Exercise Ph.D., Westin Hotels Distinguished Professor at Washington State University

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

HRT383


Hrt383 dinner main courses l.jpg
HRT383 Dinner Main Courses Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

13.33%

0 Contribution Margin $14.14

HRT383


Hrt383 dinner main courses27 l.jpg
HRT383 Dinner Main Courses Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

13.33%

0 Contribution Margin $14.14

HRT383


The four key menu categories28 l.jpg
The Four Key Menu Categories Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • 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

HRT383


Hrt383 dinner desserts l.jpg
HRT383 Dinner Desserts Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

16.0%

0 Contribution Margin $4.73

HRT383


Hrt383 dinner desserts30 l.jpg
HRT383 Dinner Desserts Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

16.0%

0 Contribution Margin $4.34

HRT383


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Conclusion Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • 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

HRT383


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Where to Get More Information Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • 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

HRT383


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