How multi-location restaurants can use menu engineering to boost profit

Restaurant operators are always trying to find ways to cut costs and improve overall efficiency, which has become even more important since the pandemic started.

While there are many different strategies for increasing efficiency and becoming a more profitable business, the concept of menu engineering has become much more prominent over the past few years. 

Menu engineering is the art of designing a highly profitable menu based on data. 

There is nothing new about the concept. Dark kitchens have been creating hyper-efficient menus for years. Throughout the pandemic, restaurants of all kinds and sizes have started looking into menu engineering to save on labor and food costs.

Engineering a menu involves categorizing all menu items based on profitability and popularity, then redesigning the menu to ensure that each food or drink is profitable, popular, or both.

Learn more about the Deliverect Menu Management feature here

Building a winning menu can boost your profits by up to 15% if you get it right. An optimized menu can bring in more money, and streamlining it can help multi-location restaurants scale much faster and more efficiently. When your menu is down to a science, you are one step closer to successfully expanding your business into more markets. 

While menu engineering applies to printed menus and menu boards, it also concerns online menus. In this guide, we will focus on the latter.

The benefits of menu engineering in a nutshell

While most restaurants get into menu engineering to boost profit, there are many other reasons to have a good look at your menu and its design.

Optimizing your menu enables you to consider your food and beverage offerings from a consumer’s perspective, helping you connect with your customers. 

But there’s more. If you get it right and your menu converts better, your restaurant will climb up the rankings of third-party delivery platforms like Uber Eats, Deliveroo, and DoorDash. With more visibility comesmore orders.

By eliminating menu items that aren’t performing well and aren’t popular with your customers, you can reduce food waste, too, getting rid of items that are taking up space on your shelves.

How to get started with menu engineering

The menu engineering process has five steps. The time each one takes depends on the length of your restaurant’s menu.

#1 Deep dive into each menu item’s cost, margin, and price

Costing your menu is the first thing you should do (and you should do it thoroughly). Break down every menu item to its ingredients to determine the food cost per servingand the contribution margin. That will tell you exactly how much profit you get from each menu item.

#2 Find your bestsellers

Next, you’ll want to determine the popularity of each menu item. 

If you’re optimizing a traditional paper menu, you can use sales reports from your restaurant POS system to see how much you sold off a specific menu item over a period of time. 

Getting a firm grasp of your online bestsellers can be more challenging, but restaurant platform solutions like Deliverect centralize all your sales to your POS, consolidating all sales info into one clear overview.

#3 Use a menu matrix to categorize menu items

Now that you know exactly how profitable and popular your menu items are, you can put them in a menu matrix. This will help you see which items are responsible for most of your profits and which ones are not really pulling their weight.

The menu matrix typically uses four categories:

• Stars: menu items that are both highly profitable and popular

• Puzzles: menu items that are highly profitable but not popular

• Plowhorses: menu items that are low-profit and popular

• Dogs: menu items that are neither profitable nor popular

#4 Rethink your offering

Once you’ve categorized each item, you can optimize your menu offering.

Your stars are the items you’ll want to promote in any way you can, as they are inexpensive to make an

d highly wanted among customers. Needless to say, your menu should highlight these items.

On the other hand, the puzzles are named puzzles for a reason: you’ll need to investigate why these items aren’t landing well and try to move them into your stars section. 

Try experimenting with descriptions, photos, or even prices to see if sales volume increases. Tools like Deliverect’s Menu Builder allow you to make changes to multiple menus across all your different locations with just one click, making it easy to update them and experiment with confidence.

Your plowhorses are more expensive to make. You can either raise your prices or lower food costs by reworking the recipe or serving smaller portions.

The dogs, finally, are items that are neither popular nor making a profit. The most logical step is to eliminate these items from the menu altogether. If you aren’t ready to give up on an item, try reworking it based on customer feedback. Your dogs shouldn’t be emphasized on the menu so they don’t distract guests from your stars and puzzles.

#5 Redesign your menu (and evaluate results)

Now that your menu offering is down, you can move on to the final step of the menu engineering process and start redesigning your menu.

When designing your online menu, there are a few best practices to keep in mind:

• Don’t overwhelm consumers with an ultra-long list of menu items. Less is more!

• Break your menu into categories like starters, mains, sides, desserts, and drinks so customers can easily scan the menu.

• Highlight your popular menu items (aka your stars) and ensure they are at the top of the menu page.

• Write clear descriptions and add high-quality photos of your dishes to entice customers. 

• Make it easy to customize dishes, check allergens, and buy add-ons like drinks or desserts.

Essentially, try to approach your menu as if you were a customer. Don’t hesitate to get your staff and regulars together to collect their input.

Once your newly engineered menu has been live for a couple of weeks, look at your sales data to see if the optimizations have made your menu more profitable. You can continue to make menu tweaks effortlessly across your location and online sales platforms using solutions like Deliverect.

Engineer your menu to maximize profits and grow your business  

No matter what kind of restaurant you’re running, you can turn your menu into a money-maker by completing the five steps above.

Engineering your menu is an opportunity to put yourself in the customer’s shoes, reduce food costs and wastage, and increase your profits. As a result, you can launch your business into new locations and markets with confidence using a highly profitable menu based on business insights and customer data.

Don’t worry if your first attempt at menu engineering doesn’t have the impact you were hoping for. With Deliverect, you can easily adjust your online menus across multiple locations and platforms with a few clicks. Use Deliverect’s POS integrations and consolidated sales reports to help you measure the impact of your hard work.

Eager to get started on your optimized menu? Reach out today, and we’ll set you up with our all-in-one restaurant management platform solution.