Improve Your Restaurant’s Menu Now!
Sam Mustafa, CEO of Charleston Hospitality Group shares his insight on how to analyze your restaurant’s current offerings of your restaurant’s menu for maximizing total profitability. This is the first step to controlling your food costs. Tackle 4 types of menu performance now!
Your Menu Is Your Life-Line
Your restaurant’s menu is more than a list of items that you sell to guests. This menu provides a guide for customers to decide what to buy. It is important for restaurant managers, owners and corporate associates to understand that your menu reinforces your branding and decide which items can be promoted or ditched. You can think of your restaurant menu as a tool to convince guests to buy certain items, choose larger sizes, and taste test your latest specials. Understanding your target guests, what menu items appeal to them and the certain factors that make guests spend more is step #1 to improve your menu.
4 Types of Menu Performance
Where do you start with analyzing your menu performance? It starts with numbers. A large part of understanding what menu items are popular or should be removed comes from analyzing their profitability. I am someone who enjoys seeing visuals, so for things to make sense to me, charts and graphs are the first thing I look at.Have ever heard of the Growth-Share matrix created by Bruce D Henderson for the Boston Consulting Group? This matrix was created to help corporations analyze their business product lines. It is divided into 4 key performance areas:
Caption: Image from getbettereveryday.org
1) Star- High popularity that yields high profits. It is important to harvest these menu items and keep them popular. These are items that I suggest reinvesting in- more stock, more marketing, etc. The items generate the highest profits on your menu.
Toast All Day, our franchised restaurant concept’s star item is our specialty mimosas and brunch offerings. These items reinforce our branding and are our most popular items. To harvest and keep these menu items popular, we often run marketing campaigns around these items and carry extra inventory.
2) Cash Cows- In general, these items offer low growth and high market share. These menu items provide high profit returns and are cost-effective to hold in our inventory and sell at a higher price than purchased.
3) Question Marks- These menu items are question marks for a reason and offer high growth rates in markets they are not currently in. They have the potential to be successful, but will require a lot of marketing and reinvestments.
4) Pets- These are menu items that are no longer appealing to our target guests. They offer low market share and growth. These menu items will need to be removed from our menu or reinvented to re-engage to our guests’ interest.
Each of these performance categories offers insight on how to improve your menu and where challenges in your current menu that may need rethinking lie. By understanding these 4 types of menu product performance, you will be able to decide what items need to be divested or reinvested.Every quarter, restaurant leaders need to be reviewing their product line. It’s time forSam Mustafa is the the CEO of Charleston Hospitality Group and Toast! All Day Franchise. Named one of the nation’s 100 most influential CEOs by Nation’s Restaurant News and frequent speaker on Joe Pardavila’s Podcast on ForbesBooks Radio. He has also been featured on Medium, Authority Magazine, describing his version of the American Dream. Sam is one of the leading voices in the Restaurant Industry.
1) “5 Ways to Improve Your Restaurant Menu so You Sell More Food.” Spectrio, 11 May 2021, www.spectrio.com/qsr/5-ways-to-improve-your-restaurant-menu-so-you-sell-more-food/.
2) “Plow Horses, Puzzles, and Dogs, Oh MY: How to TACKLE 4 Types of MENU PERFORMANCE.” MarginEdge, 1 Sept. 2021, www.marginedge.com/2021/08/29/how-to-tackle-4-types-of-menu-performance/?utm_campaign=q3_emails&utm_medium=email&_hsmi=158081355&_hsenc=p2ANqtz-9NnaUVQMLTIzJGG5MZV9ujqxw7ovwQqrzqMhYxeiLawKAbqtBgBwr1XOOyoMXLCHOoAf4plvlbf_NYmwhzlQmI3umIwFlPLx-11sSRrrRbrhvhgzE&utm_content=158081355&utm_source=hs_email.
3) “What Is the Growth Share Matrix?” BCG Global, www.bcg.com/about/our-history/growth-share-matrix.
4) Hayes, Adam. “Reading the Bcg Growth-Share Matrix.” Investopedia, Investopedia, 13 Sept. 2021, www.investopedia.com/terms/b/bcg.asp.