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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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Menu Analysis & Engineering

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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.

  • 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


Objectives

By the completion of this presentation you should be able to:

  • Analyze a menu for profitability

  • Apply menu engineering to menu analysis

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Important Terms

  • Menu engineering

    • Plowhorses

    • Puzzles

    • Stars

    • Dogs

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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.

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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

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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

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Contribution MarginDollars vs. Food Cost Percentage

Which one will/should your server sell ?

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Contribution MarginDollars vs. Food Cost Percentage

Which one will/should your server sell ?

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Data Trap Spring ‘06

  • See Dinner Hand Out

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Menu Engineering

(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

(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%

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HRT383 Dinner Appetizers

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


HRT383 Dinner Appetizers

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


HRT383 Dinner Appetizers

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


HRT383 Dinner Appetizers

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


HRT383 Dinner Appetizers

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


HRT383 Dinner Appetizers

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


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

HRT383


HRT383 Dinner Appetizers

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


HRT383 Dinner Appetizers

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


HRT383 Dinner Appetizers

100%

Popularity

16%

0 Contribution Margin $6.39

HRT383


Data Trap Winter ‘06

  • See Dinner Hand Out for

    • Main Courses &

    • Desserts

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Exercise

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

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HRT383 Dinner Main Courses

100%

Popularity

13.33%

0 Contribution Margin $14.14

HRT383


HRT383 Dinner Main Courses

100%

Popularity

13.33%

0 Contribution Margin $14.14

HRT383


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

HRT383


HRT383 Dinner Desserts

100%

Popularity

16.0%

0 Contribution Margin $4.73

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HRT383 Dinner Desserts

100%

Popularity

16.0%

0 Contribution Margin $4.34

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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

HRT383


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