Reviewing Your Menu

Reviewing Your Menu

As restaurant operators, it is important to review and update your menu regularly. A well-planned menu helps diners choose better and increase profitability. Reviewing the menu regularly allows restaurant operators to see which dishes are the most popular and profitable in your menu. There are many tools that are helpful for reviewing the menu but the Sales Mix Analysis is the most effective.

Why a Sales Mix Analysis?

A Sales Mix Analysis helps to identify the most popular menu items based on sales and the most profitable dishes. By comparing the popularity and profitability of dishes, you’ll be able to identify the strong elements of the menu, and which ones need reworking.

How To Do a Sales Mix Analysis

There are several steps to creating a Sales Mix Analysis. Before starting, it’s important to understand the terms used:

Menu Mix Percentage (MM%)
Reflects the popularity of a dish

Selling Price (SP)
The price you sell a dish at

Contribution Margin (CM)
The profitability of a dish

Average MM% (AMM%)
The average popularity of all dishes on your menu

Food Cost (FC)
The cost of the dish to create

Average CM (ACM)
The average profitability of all dishes on your menu


Step 1: Calculate the Menu Mix Percentage (MM%)

a. Get the Number of dishes sold for Dish A in a week.

b. Calculate Dish A’s MM% using this formula:
(No. of Dish A Sold / Total dishes sold) x 100% = MM%

For example, if 90 Chicken Chops were sold and the total dishes sold is 600, the MM% of the Chicken Chop will be:
(90 / 600) x 100% = 15 MM%.

c. Calculate the AMM% for all the dishes on your menu using this formula:
(100% / Total dishes in your menu) x 70% = AMM%
Similarly, if the total dishes in the menu is 5, your AMM% would be:
(100% / 5) x 70% = 14 AMM%

As a rule of thumb, if the MM% is higher than the AMM%, the dish will fall under the HIGH MM% category. Likewise, if the MM% is lower than the AMM%, the dish will fall under the LOW MM% category.


Step 2: Calculate the Contribution Margin (CM)

a. Get the Selling Price (SP) and Food Cost (FC) of Dish A.

b. Calculate Dish A’s Contribution Margin (CM) using this formula:
Selling Price – Food Cost = CM

For example, if the Chicken Chop’s SP is $145 and its FC is $50, its CM will be:
$145 – $50 = $95.

c. Calculate the Average CM (ACM) for all the dishes on your menu using this formula:
Total CM for all dishes / Total dishes in your menu = ACM
Similarly, if the total CM for all your dishes is $615 and the total dishes in your menu is 5, your ACM would be:
$615 / 5 = $123

As a general rule, if the CM is higher than the ACM, the dish will fall under the HIGH CM category.
However, if the CM is lower than the ACM, the dish will fall under the LOW CM category.


Step 3: Use the Menu Classification Chart

Once we’ve got the MM% and CM of a menu item, we can plot it against the Menu Classification Chart to determine which zone your dish falls under in terms of popularity and profitability.

Menu Classification Chart




Going back to the example of Chicken Chop, we know that it has a HIGH MM% Category and a LOW CM Category.

Plotting it against this chart, Chicken Chop would fall under the Plough Horse, selling a lot but making very little profit. Read on below to learn more about what the different symbols mean and tips for each of them.

What do the symbols mean?

 

Plough Horse

A menu item with high MM% and low CM that is popular but not profitable.

Tips for Plough Horse Items:

  • Explore using pricing psychology to increase the price
  • Review cost of ingredients for possible cost reduction without affecting the quality
  • Review portion size and see if it can be reduced
  • Try partnering this item with a lower cost menu item to be sold at a new price
 

Star

A menu item with high MM% and high CM that is popular and profitable.

Tips for Star Items:

  • Maintain quality and price
  • Do suggestive selling to further boost sales
  • Take advantage of its popularity to introduce new dishes as side dishes
  • Find out why it’s popular and profitable to help you develop future menu offerings

Dog

A menu item with low MM% and low CM that is not popular and not profitable.

Tips for Dog Items:

  • Remove from your menu
  • Replace with a menu item that has better potential based on diners’ feedback
 

Puzzle

A menu item with low MM% and high CM that is not popular but highly profitable.

Tips for Puzzle Items:

  • Improve presentation and flavour
  • Do suggestive selling
  • Serve as a “set menu” along with a highly popular dish
  • Experiment with a more recognisable name

Analysing the Results

With these results, you can review your menu and identify which dishes are profitable, should be improved on or removed completely. This will not only help make your menu more profitable but also keep it fresh and attractive for your diners.

Learn how Menu Engineering can make the most of your Stars and improve the profitability of your restaurant.

 

back top send page print page
Planta of Unilever Food Solutions Best Foods of Unilever Food Solutions Carte D'Or of Unilever Food Solutions Lipton of Unilever Food Solutions Knorr of Unilever Food Solutions
www.unileverfoodsolutions.com.sg