How to Engineer Your Restaurant Menu for Max Profitability

The foundation of any successful restaurant is the profitability of its menu, and more and more operators are adopting technology to ensure consistently healthy margins. Through a turbulent operating period and changing rates of food inflation, having complete visibility of the popularity and profitability of your menu items has become even more critical.

With so many numbers to crunch, certain technologies can provide the clarity and accuracy your restaurant needs. If you pair the use of your analytics software with clever menu designs, careful wastage & portion controls, and effective communication with your servers, you can keep one step ahead of economic challenges and produce your most profitable menu yet.

Identify the Popularity and Profitability of Each Menu Item Using Your Tech

Understanding what is and isn’t working for your restaurant comes in two parts – what your customers love and repeatedly order, and which dishes are driving profits for your business.

Your analytics software can reveal your most purchased menu items within their respective categories or a selected time period. You can see larger sales groups such as food, drink, and function room hire and filter these by the highest performing. Delve in closer to see categories such as mains, starters, and children’s menu, and further still, to see your best-performing menu items within a custom or pre-set period. When creating a seasonal menu such as your new summer offering, you could produce custom data to see your best-performing dishes from the previous year.

When aiming to understand the profitability of your menu items, your stock management software can give granular, ingredient-by-ingredient data. See which of your menu items have the highest profit margins, and for those with low profit, you can analyse the price of each ingredient to make a strategic decision on changes to make.

Your ultimate aim is to categorise each of your menu items based on popularity & profitability. With this information, you can decide on the actions you need to take, such as recipe tweaking or upselling tactics.

High popularity & high profitability

These items are the stars of your menu, and you’ll want to draw as much attention to them as possible. Clever menu design & upselling from your servers can further push the performance of these dishes.

Low popularity & high profitability

These menu items could be great for your overall profits, but how can you boost their popularity? A rename or tweaked description could be the way to go, or you can encourage staff to promote these dishes or draw focus using changeable boards within your restaurant.

High popularity & low profitability

Your customers want you to keep these items on your menu, but how could they better benefit your business? Perhaps consider raising the price or re-source ingredients to increase profitability.

Low popularity & low profitability

It might be time to cut these items from your menu or consider adjusting the price or recipe.

Maintain Strong Profit Margins with Close Monitoring of Suppliers and Accurate Recipe Costing

Producing a menu that consistently delivers for your business requires continued monitoring of your suppliers and cost prices. A comprehensive back-office system can streamline this task immeasurably, and help to analyse at a granular level where your business can maximise its profits.

Through your stock management software, you can directly purchase stock, manage deliveries, fully cost your recipes and monitor stock levels. With accurate data, you can spot any movements to your margins that may require action to keep your menu profitable, such as changes to your pricing, re-sourcing supply, or negotiating better cost prices.

An accurate calculation of the cost of ingredients per serving means you can determine why the profitability of a dish may have changed. For example, with produce that has particularly volatile pricing such as salad and vegetables, you might see your profit margins regularly shifting for any dish containing these ingredients. With clear and accurate data, you can quickly spot these movements and decide on a course of action.

Effectively Manage Costly Wastage and Keep a Close Eye on Portion Control

Portion control ensures the consistency that keeps your customers happy, but it is also critical to controlling costs and reducing wastage. If you’re a multi-site operator, managing consistency & portions is of even more importance – a handful of chips or squirt of sauce can be very different amounts to different chefs!

With your recipe management tool accurately costing the price of ingredients per serving, you’ll want to ensure this is followed closely with established kitchen practices. Train your kitchen staff on the importance of these practises to your profitability, and make sure they have the tools they need, such as scales and portioning scoops. Asking questions and communicating with your team is a great way to ensure you have your portions right. Is there a dish that customers regularly struggle to finish? Finding this out could be an opportunity to reduce the size and increase its profitability.

Your EPoS system should allow you to easily record wastage and its value using your till. Accurately recording your wastage and wastage reasons helps with more precise forecasting when it comes to placing orders.

Re-design Your Menu with Maximum Control Over What Your Customers Choose

Your physical menu is a crucial tool for leveraging profits, and this is your opportunity to guide buying decisions based on your analytical research and menu item margins. You’ve put the work in to categorise your dishes based on profitability and popularity, and now it’s time to make informed menu placements based on those results. A mindfully designed menu can have a sizeable impact on overall sales results, and there are a few simple tips you can follow;

Reducing the amount of choice in your menu can help guide your customer’s decisions and sell profitable dishes more often. An overwhelming menu can often result in diners ordering fewer items or resorting to a trusted favourite.
If you have a jam-packed menu, consider removing ‘duds’ (low profitability & low popularity).
Subtly highlight your most profitable dishes with colour, boxes, or simple graphics.
Consider where our eyes naturally fall when placing your high-profit items. For one-page menus, this would be in the top half, and for multi-page menus, this would be at the top of the right-hand page.
Place your profitable dishes underneath or near an expensive item to make it appear like a good deal.

Train Your Staff on What They Should Be Upselling and Why

Once your menu is optimised, your front-of-house team needs to be up to speed. Train your staff on which items to push to boost profitability – an instruction that can change depending on stock levels or fluctuations in produce prices. If you spot a high-margin side dish via your stock management software, advise your team on which mains these would be best to pair with. Perhaps you received a discount from your supplier on cases of Malbec and want to make the most of higher margins – make sure to tell your team and encourage them to recommend it with particular meals.

A bit of light-hearted, incentivised competition can also help your plan for profitability, and this is something your tech can help with, too. Within your analytics software, you can monitor each server’s performance and measure this against your set KPIs.