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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
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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 Price menu items Locate menu items on a menu.
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Important Terms
Menu engineering Plowhorses Puzzles Stars Dogs
Menu Placement Pricing
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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:
1. Must be profitable in terms of individual item profitability
2. Most profitable item must be selling the best.
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Stars, Plowhorses, Puzzles, & Dogs
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.
Plow Horse
Dog
PuzzleStar
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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
Sirloin Pasta Coffee
Selling Price $22.00 $18.00 $2.00
Cost $10.36 $4.54 $0.19
Food Cost % 47.09% 25.22% 9.5%
Cont. Margin $ $11.64 $13.46 $1.81
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Contribution MarginDollars vs. Food Cost Percentage
Sirloin Pasta Coffee
Selling Price $22.00 $18.00 $2.00
Cost $10.36 $4.54 $0.19
Food Cost % 47.09% 25.22% 9.5%
Cont. Margin $ $11.64 $13.46 $1.81
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Desserts
Menu Plate F/C Contri-bution
Quan-tity Net Total
Popu-larity Menu
MENU ITEM Price Cost % Margin SoldIncom
e Cost Engineering
RKR Apple Crisp 5.00 0.70 14.00% 4.30 58 290.00 40.60 46.40%
Sampler 5.00 0.84 16.80% 4.16 18 90.00 15.12 14.40%
Choc Bread Pudding 5.00 1.12 22.40% 3.88 32 160.00 35.84 25.60%
Mngr Special 5.00 1.12 22.40% 3.88 17 85.00 19.04 13.60%
TOTAL DESSERTS 17.7% 4.12 125 6.25110.6
0
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Popularity
Average Popularity
80% of the average item sales per Dessert:
100 / 4 X 80% = 20%
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Desserts
Menu Plate F/C Contri-bution
Quan-tity Net Total
Popu-larity Menu
MENU ITEM Price Cost % Margin SoldIncom
e Cost Engineering
RKR Apple Crisp 5.00 0.70 14.00% 4.30 58 290.00 40.60 46.40%
Sampler 5.00 0.84 16.80% 4.16 18 90.00 15.12 14.40%
Choc Bread Pudding 5.00 1.12 22.40% 3.88 32 160.00 35.84 25.60%
Mngr Special 5.00 1.12 22.40% 3.88 17 85.00 19.04 13.60%
TOTAL DESSERTS 17.7% 4.12 125 6.25110.6
0 20%
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HRT383 Lunch DessertsPlowhorse
Star
Dog
Puzzle
100%
20%
Popularity
0 Contribution Margin $4.12
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HRT383 Lunch DessertsPlowhorse
* Choc BP $3.88/25.60%
Star
* Apple Crisp $4.30/46.40%
* Mngr Special $3.88/19.04%
Dog
* Sampler $4.16/14.4%
Puzzle
100%
20%
Popularity
0 Contribution Margin $4.12
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Desserts
Menu Plate F/C Contri-bution
Quan-tity Net Total
Popu-larity Menu
MENU ITEM Price Cost % Margin SoldIncom
e Cost Engineering
RKR Apple Crisp 5.00 0.70 14.00% 4.30 58 290.00 40.60 46.40% Star
Sampler 5.00 0.84 16.80% 4.16 18 90.00 15.12 14.40% Puzzle
Choc Bread Pudding 5.00 1.12 22.40% 3.88 32 160.00 35.84 25.60%
PlowHorse
A la CarteMngr Special 5.00 1.12 22.40% 3.88 17 85.00 19.04 13.60% Dog
TOTAL DESSERTS 17.7% 4.12 125 6.25110.6
0 20%
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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
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HRT383 Lunch DessertsPlowhorse
* Choc BP $3.88/25.60%
Star
* Apple Crisp $4.30/46.40%
* Mngr Special $3.88/19.04%
Dog
* Sampler $4.16/14.4%
Puzzle
100%
20%
Popularity
0 Contribution Margin $4.12
Increase $ Cut Portion ?
Eliminate?
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HRT383 Lunch DessertsPlowhorse
* Apple Crisp $2.98/44.83%
Star
* Crème Brulee $4.55/22.76%
* Sampler $3.29/18.62% * Choc BP $3.30/13.79%Dog
Puzzle
100%
20%
Popularity
0 Contribution Margin $3.44
Increase $ Cut Portion ?
Eliminate?
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Menu Plate Contributi
on
Quantity Net Total Popularity Menu
MENU ITEM Price Cost % Margin Sold Income Cost Engineering
Asian Salad w/ Chix 10.00 3.67 36.70% 6.33 17 170.00 62.39 5.25% 5.56%
Asian Salad 8.00 2.23 27.88% 5.77 1 8.00 2.23 0.31%
SouthWestern Salad 10.00 2.95 29.50% 7.05 24 240.00 70.80 7.41%
Cobb Salad 10.00 1.94 19.40% 8.06 16 160.00 31.04 4.94%
Caesar Salad 8.00 0.61 7.63% 7.39 2 16.00 1.22 0.62% 3.40%
Caesar Salad with Chicken 10.00 1.26 12.60% 8.74 6 60.00 7.56 1.85%
Caesar Salad with Shrimp 10.00 3.49 34.90% 6.51 3 30.00 10.47 0.93%
Cheese Quesadilla 8.00 3.25 40.63% 4.75 16 128.00 52.00 4.94% 16.98%
Quesadilla with Chicken 10.00 3.90 39.00% 6.10 25 250.00 97.50 7.72%
Quesadilla with Shrimp 10.00 6.13 61.30% 3.87 14 140.00 85.82 4.32%
Veggie Sandwich 7.00 1.36 19.43% 5.64 20 140.00 27.20 6.17%
Burger 9.00 2.89 32.11% 6.11 31 279.00 89.59 9.57% 18.52%
Burger - Cheese 10.00 2.99 29.90% 7.01 8 80.00 23.92 2.47%
Burger - Bacon 10.00 3.09 30.90% 6.91 5 50.00 15.45 1.54%
Burger - Cheese & Bacon 11.00 3.19 29.00% 7.81 16 176.00 51.04 4.94%
Turkado 8.00 2.56 32.00% 5.44 38 304.00 97.28 11.73%
Spaghetti 9.00 1.80 20.00% 7.20 18 162.00 32.40 5.56% Mahi Mahi 12.00 5.90 49.17% 6.10 37 444.00 218.30 11.42%
Steak 14.00 7.24 51.71% 6.76 27 378.00 195.48 8.33%
SUBTOTAL MAIN DISHES 36.44% 6.31 324
3215.00
1171.69
Lunch Main Courses
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Popularity
Average Popularity
80% of the average item sales per Main Dishes:
100 / 11 X 80% = 7.27%
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Menu Plate Contributi
on
Quantity Net Total Popularity Menu
MENU ITEM Price Cost % Margin Sold Income Cost Engineering
Asian Salad w/ Chix 10.00 3.67 36.70% 6.33 17 170.00 62.39 5.25% 5.56%
Asian Salad 8.00 2.23 27.88% 5.77 1 8.00 2.23 0.31%
SouthWestern Salad 10.00 2.95 29.50% 7.05 24 240.00 70.80 7.41%
Cobb Salad 10.00 1.94 19.40% 8.06 16 160.00 31.04 4.94%
Caesar Salad 8.00 0.61 7.63% 7.39 2 16.00 1.22 0.62% 3.40%
Caesar Salad with Chicken 10.00 1.26 12.60% 8.74 6 60.00 7.56 1.85%
Caesar Salad with Shrimp 10.00 3.49 34.90% 6.51 3 30.00 10.47 0.93%
Cheese Quesadilla 8.00 3.25 40.63% 4.75 16 128.00 52.00 4.94% 16.98%
Quesadilla with Chicken 10.00 3.90 39.00% 6.10 25 250.00 97.50 7.72%
Quesadilla with Shrimp 10.00 6.13 61.30% 3.87 14 140.00 85.82 4.32%
Veggie Sandwich 7.00 1.36 19.43% 5.64 20 140.00 27.20 6.17%
Burger 9.00 2.89 32.11% 6.11 31 279.00 89.59 9.57% 18.52%
Burger - Cheese 10.00 2.99 29.90% 7.01 8 80.00 23.92 2.47%
Burger - Bacon 10.00 3.09 30.90% 6.91 5 50.00 15.45 1.54%
Burger - Cheese & Bacon 11.00 3.19 29.00% 7.81 16 176.00 51.04 4.94%
Turkado 8.00 2.56 32.00% 5.44 38 304.00 97.28 11.73%
Spaghetti 9.00 1.80 20.00% 7.20 18 162.00 32.40 5.56% Mahi Mahi 12.00 5.90 49.17% 6.10 37 444.00 218.30 11.42%
Steak 14.00 7.24 51.71% 6.76 27 378.00 195.48 8.33%
SUBTOTAL MAIN DISHES 36.44% 6.31 324
3215.00
1171.69 7.27%
Lunch Main Courses
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Exercise
Please work with your fellow students and come up with suggestions/decisions.
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HRT383 Lunch Main CoursesPlowhorse
Star
Dog Puzzle
100%
7.27%
Popularity
0 Contribution Margin $6.31
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Menu Plate Contributi
on
Quantity Net Total Popularity Menu
MENU ITEM Price Cost % Margin Sold Income Cost Engineering
Asian Salad w/ Chix 10.00 3.67 36.70% 6.33 17 170.00 62.39 5.25% 5.56%
Asian Salad 8.00 2.23 27.88% 5.77 1 8.00 2.23 0.31%
SouthWestern Salad 10.00 2.95 29.50% 7.05 24 240.00 70.80 7.41%
Cobb Salad 10.00 1.94 19.40% 8.06 16 160.00 31.04 4.94%
Caesar Salad 8.00 0.61 7.63% 7.39 2 16.00 1.22 0.62% 3.40%
Caesar Salad with Chicken 10.00 1.26 12.60% 8.74 6 60.00 7.56 1.85%
Caesar Salad with Shrimp 10.00 3.49 34.90% 6.51 3 30.00 10.47 0.93%
Cheese Quesadilla 8.00 3.25 40.63% 4.75 16 128.00 52.00 4.94% 16.98%
Quesadilla with Chicken 10.00 3.90 39.00% 6.10 25 250.00 97.50 7.72%
Quesadilla with Shrimp 10.00 6.13 61.30% 3.87 14 140.00 85.82 4.32%
Veggie Sandwich 7.00 1.36 19.43% 5.64 20 140.00 27.20 6.17%
Burger 9.00 2.89 32.11% 6.11 31 279.00 89.59 9.57% 18.52%
Burger - Cheese 10.00 2.99 29.90% 7.01 8 80.00 23.92 2.47%
Burger - Bacon 10.00 3.09 30.90% 6.91 5 50.00 15.45 1.54%
Burger - Cheese & Bacon 11.00 3.19 29.00% 7.81 16 176.00 51.04 4.94%
Turkado 8.00 2.56 32.00% 5.44 38 304.00 97.28 11.73%
Spaghetti 9.00 1.80 20.00% 7.20 18 162.00 32.40 5.56% Mahi Mahi 12.00 5.90 49.17% 6.10 37 444.00 218.30 11.42%
Steak 14.00 7.24 51.71% 6.76 27 378.00 195.48 8.33%
SUBTOTAL MAIN DISHES 36.44% 6.31 324
3215.00
1171.69 7.27%
Lunch Main Courses
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Menu Plate Contributi
on
Quantity Net Total Popularity Menu
MENU ITEM Price Cost % Margin Sold Income Cost Engineering
Asian Salad w/ Chix 10.00 3.67 36.70% 6.33 17 170.00 62.39 5.25% 5.56%
Asian Salad 8.00 2.23 27.88% 5.77 1 8.00 2.23 0.31%
SouthWestern Salad 10.00 2.95 29.50% 7.05 24 240.00 70.80 7.41%
Cobb Salad 10.00 1.94 19.40% 8.06 16 160.00 31.04 4.94%
Caesar Salad 8.00 0.61 7.63% 7.39 2 16.00 1.22 0.62% 3.40%
Caesar Salad with Chicken 10.00 1.26 12.60% 8.74 6 60.00 7.56 1.85%
Caesar Salad with Shrimp 10.00 3.49 34.90% 6.51 3 30.00 10.47 0.93%
Cheese Quesadilla 8.00 3.25 40.63% 4.75 16 128.00 52.00 4.94% 16.98%
Quesadilla with Chicken 10.00 3.90 39.00% 6.10 25 250.00 97.50 7.72%
Quesadilla with Shrimp 10.00 6.13 61.30% 3.87 14 140.00 85.82 4.32%
Veggie Sandwich 7.00 1.36 19.43% 5.64 20 140.00 27.20 6.17%
Burger 9.00 2.89 32.11% 6.11 31 279.00 89.59 9.57% 18.52%
Burger - Cheese 10.00 2.99 29.90% 7.01 8 80.00 23.92 2.47%
Burger - Bacon 10.00 3.09 30.90% 6.91 5 50.00 15.45 1.54%
Burger - Cheese & Bacon 11.00 3.19 29.00% 7.81 16 176.00 51.04 4.94%
Turkado 8.00 2.56 32.00% 5.44 38 304.00 97.28 11.73%
Spaghetti 9.00 1.80 20.00% 7.20 18 162.00 32.40 5.56% Mahi Mahi 12.00 5.90 49.17% 6.10 37 444.00 218.30 11.42%
Steak 14.00 7.24 51.71% 6.76 27 378.00 195.48 8.33%
SUBTOTAL MAIN DISHES 36.44% 6.31 324
3215.00
1171.69 7.27%
Lunch Main Courses
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Menu Plate Contributi
on
Quantity Net Total Popularity Menu
MENU ITEM Price Cost % Margin Sold Income Cost Engineering
Asian Salad w/ Chix 10.00 3.67 36.70% 6.33 17 170.00 62.39 5.25% 5.56%
Asian Salad 8.00 2.23 27.88% 5.77 1 8.00 2.23 0.31% PUZZLE /DOG
SouthWestern Salad 10.00 2.95 29.50% 7.05 24 240.00 70.80 7.41% PUZZLE
Cobb Salad 10.00 1.94 19.40% 8.06 16 160.00 31.04 4.94% PUZZLE
Caesar Salad 8.00 0.61 7.63% 7.39 2 16.00 1.22 0.62% 3.40%
Caesar Salad with Chicken 10.00 1.26 12.60% 8.74 6 60.00 7.56 1.85% PUZZLE
Caesar Salad with Shrimp 10.00 3.49 34.90% 6.51 3 30.00 10.47 0.93%
Cheese Quesadilla 8.00 3.25 40.63% 4.75 16 128.00 52.00 4.94% 16.98%
Quesadilla with Chicken 10.00 3.90 39.00% 6.10 25 250.00 97.50 7.72% PLOW HORSE
Quesadilla with Shrimp 10.00 6.13 61.30% 3.87 14 140.00 85.82 4.32%
Veggie Sandwich 7.00 1.36 19.43% 5.64 20 140.00 27.20 6.17% DOG
Burger 9.00 2.89 32.11% 6.11 31 279.00 89.59 9.57% 18.52%
Burger - Cheese 10.00 2.99 29.90% 7.01 8 80.00 23.92 2.47% STAR
Burger - Bacon 10.00 3.09 30.90% 6.91 5 50.00 15.45 1.54%
Burger - Cheese & Bacon 11.00 3.19 29.00% 7.81 16 176.00 51.04 4.94%
Turkado 8.00 2.56 32.00% 5.44 38 304.00 97.28 11.73% PLOW HORSE
Spaghetti 9.00 1.80 20.00% 7.20 18 162.00 32.40 5.56% PUZZLE Mahi Mahi 12.00 5.90 49.17% 6.10 37 444.00 218.30 11.42% PLOW HORSE
Steak 14.00 7.24 51.71% 6.76 27 378.00 195.48 8.33% STAR
SUBTOTAL MAIN DISHES 36.44% 6.31 324
3215.00
1171.69 7.27%
Lunch Main Courses
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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
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Main CoursesMENU ITEM Menu Engineering Recommendation
Asian Salad w/ Chix PUZZLE/DOG Lower $?/Eliminate
SouthWestern Salad PUZZLE Lower $?
Cobb Salad PUZZLE Lower $?
Caesar Salad PUZZLE Lower $?
Quesadilla (Chix & Schrimp) PLOW HORSE
Increase Menu $ or Reduce Portion
Veggie Sandwich DOG Eliminate
Burger (Cheese & Bacon) STAR
Turkado PLOW HORSEIncrease Menu $ or
Reduce Portion
Spaghetti PUZZLE Lower $?
Mahi Mahi PLOW HORSEIncrease Menu $ or
Reduce Portion
Steak STAR
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Placement
Two Schools of thought
1. Menu Sequence Menu should follow progression of meal
2. Focal Points Use focal points on the menu to push certain
menu items
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Specials
Larger Bolder type than the rest of menu Longer description Concept of Closure
people’s eyes are drawn to what ever is enclosed by a box
Color, illustration, and/or pictures, bullets can be used to draw attention to signature items.
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Menu Pricing
Odd-Cents pricing Majority of prices end in either a “5” or a “9”
Price rounding. Within certain price bands, price increases have
little negative impact on customers
Placement
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Price Placement
Baked Chicken……….$8.99
Lemon Sole………….$11.99
Lamb Steak………….$12.99
Swordfish Steak…..…$14.99
BAKED CHICKENTender pieces of chicken breast
$8.99
LEMON SOLEFresh filets sautéed with lemon caper sauce
$11.99
LAMB STEAK Center cut of lamb served on a bed of rice
$12.99
SWORDFISH STEAKCharcoal grilled served with beurre blanc
$14.99
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Price Placement
BAKED CHICKENTender pieces of chicken breast
Eight dollars and ninety nine cents
LEMON SOLEFresh filets sautéed with lemon caper sauce
Eleven dollars and ninety nine cents
LAMB STEAK Center cut of lamb served on a bed of rice
Twelve dollars and ninety nine cents
SWORDFISH STEAKCharcoal grilled served with beurre blanc
Fourteen dollars and ninety nine cents
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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