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Menu Analysis & Engineering

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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  1. Menu Analysis & Engineering HRT383

  2. 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

  3. Objectives By the completion of this presentation you should be able to: • Analyze a menu for profitability • Apply menu engineering to menu analysis HRT383

  4. Important Terms • Menu engineering • Plowhorses • Puzzles • Stars • Dogs HRT383

  5. 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

  6. 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

  7. 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 HRT383

  8. Contribution MarginDollars vs. Food Cost Percentage HRT383

  9. Contribution MarginDollars vs. Food Cost Percentage Which one will/should your server sell ? HRT383

  10. Contribution MarginDollars vs. Food Cost Percentage Which one will/should your server sell ? HRT383

  11. Data Trap Spring ‘06 • See Dinner Hand Out HRT383

  12. 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 HRT383

  13. 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% HRT383

  14. HRT383 Dinner Appetizers 100% Popularity 16% 0 Contribution Margin $6.39 HRT383

  15. HRT383 Dinner Appetizers 100% Popularity 16% 0 Contribution Margin $6.39 HRT383

  16. HRT383 Dinner Appetizers 100% Popularity 16% 0 Contribution Margin $6.39 HRT383

  17. HRT383 Dinner Appetizers 100% Popularity 16% 0 Contribution Margin $6.39 HRT383

  18. HRT383 Dinner Appetizers 100% Popularity 16% 0 Contribution Margin $6.39 HRT383

  19. HRT383 Dinner Appetizers 100% Popularity 16% 0 Contribution Margin $6.39 HRT383

  20. 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

  21. HRT383 Dinner Appetizers 100% Popularity 16% 0 Contribution Margin $6.39 HRT383

  22. HRT383 Dinner Appetizers 100% Popularity 16% 0 Contribution Margin $6.39 HRT383

  23. HRT383 Dinner Appetizers 100% Popularity 16% 0 Contribution Margin $6.39 HRT383

  24. Data Trap Winter ‘06 • See Dinner Hand Out for • Main Courses & • Desserts HRT383

  25. Exercise • Please work with your fellow students and come up with suggestions/decisions. HRT383

  26. HRT383 Dinner Main Courses 100% Popularity 13.33% 0 Contribution Margin $14.14 HRT383

  27. HRT383 Dinner Main Courses 100% Popularity 13.33% 0 Contribution Margin $14.14 HRT383

  28. 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

  29. HRT383 Dinner Desserts 100% Popularity 16.0% 0 Contribution Margin $4.73 HRT383

  30. HRT383 Dinner Desserts 100% Popularity 16.0% 0 Contribution Margin $4.34 HRT383

  31. 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 HRT383

  32. 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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