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We almost feel like we shouldn’t say it out loud, but now, It looks like we can finally see the light at the end of the long Pandemic lockdown tunnel. Now the hard work of rebuilding begins. Collectively, we have lost much. However, we now have two choices in front of us. We can start tallying up our losses and lamenting the cost of this pandemic, or we could choose to focus instead on the positive changes that the pandemic has already set the groundwork for and all of the new ideas we have been daydreaming about during the UK National Lockdowns. We can get started on these changes right now by creating or re-creating the menu to make it more profitable.

Analyse Your Existing Menu

calculating menu costsOf course, to know what we need to change, we must first understand what we already have. To analyse your restaurant’s current menu profitability, we will need a list of the existing menu items and the existing menu price listed for each item

Calculate Menu Item Profitability

The Gross Profit Margins (GPM) is the percentage of an individual item’s menu price that remains after the raw cost of the ingredients has been deducted. To determine the GPM of items on an existing menu, you will need the following formula:

Gross Profit Margin = (Menu Price – Raw Cost)/Menu Price

The true overall profitability or bottom line of your restaurant menu can only be determined once labour and operating costs have been calculated and deducted from the gross profits earned from menu item sales. We do not need to calculate profit and loss at the granular level during the menu design phase. We will just need to bear in mind that the GPM of each menu item should be high enough to allow for a net profit once labour and operating costs are deducted. The higher the GPM of each individual menu item, the higher the total gross profit will be and the higher our bottom line or net profit will ultimately be. It is crucial to the success of your restaurant to make sure that your menu items are producing high GPM to ensure that you do not wind up with a bottom line that is in the red.

Alright, that is enough of the technical details. The price calculation instruction we have provided here is extremely basic and intended to give you the most generalised idea of the profitability of your existing menu. Calculating actual profitability involves many variables that are far beyond the scope of menu engineering.
Once we have a general idea of the menu items and their prices, we can start digging into the fun stuff and looking at the myriad ways we can optimise the menu to increase profitability.

Menu Engineering

menu engineeringNo matter what moniker you use ‘subliminal messaging, the power of suggestion, mental manipulation, or social nudging’; businesses have been using advanced psychology techniques as subtle manipulation tools to nudge consumers to feel a certain way or take a certain action for years.
The hospitality industry is certainly no exception. Restaurants call it menu engineering.

Teams of menu engineers analyse the role that specific images and words play in steering a consumer to choose one menu item over another. They will use the valuable information they have discovered to create menus that are designed to maximise the amount of consumer attention on the menu items that will help drive restaurant profits.

Prime Real Estate

According to a recent Gallup poll, diners spend an average of 109 seconds perusing the menu before making their selections. Clearly, diners are not reading all of the information on the menu from start to finish. Instead, diners are browsing the headings to decide which one or two sections they will read more about. The menu has to grab consumer attention and get its message across to the diner in a very short amount of time. Restaurants can make the most of the time that the consumer’s eyes are on your menu by creating large, clearly-defined headings, and simple and understandable dish titles.

The areas that most people tend to look at first are called “prime real estate” in the marketing and graphic design world. The menu engineer’s research showed that when diner’s scan a menu arranged in a vertical orientation, they usually will spend the most time looking at the top and bottom of each page. The most profitable menu items should be placed in these locations for maximum visibility and increased profits.

Sweet Spot

Menu Engineers agree that when viewing a menu that is arranged vertically, diner’s eyes consistently gravitate to the top right corner of each page first. This location is referred to as the “Sweet Spot”. Restaurants should consider placing their best-selling menu items in this location. This could be a Family-Style dinner special, Mix-and-Match combo, or the most expensive dinner entrée. The goal is to use this area to showcase one of your best profit generation vehicles.

Eye Magnets

Menu Engineers borrow from the publishing world when they need to call diner’s attention to a particular bit of information. They highlight the selected text using colour blocks, quotation marks, and bold italic text to draw the reader’s eye. In the industry, these popped out snippets of highlighted text are called “eye magnets”.

Don’t be afraid to experiment. Eye magnets can be anything. You could use traditional design elements like decorative borders, arrows, brackets, or frames. Directional elements like arrows, ribbons, banners, and pointing finger illustrations can serve double duty by capturing diner attention and directing the eye to the next area of importance.

Menu designers use eye magnets to highlight the dishes in the hopes of increasing the sale of these items. Try creating a grouping of related dishes together to grab customers’ attention and encourage them to select an entrée from the box.

It is possible to have too much of a good thing. Too many eye magnets reduce the attention-grabbing ability for all of them, so try to limit them to no more than one eye magnet per section

Colour Theory

Colour is a natural attention-grabber, so adding a splash of colour for emphasis is always a solid idea. In fact, colour can be such a powerful tool that you should consider digging even deeper. Colour provokes intense emotional arousal that varies from colour to colour. Colour theory is simply choosing colours that will evoke the desired emotional response from diners. The most common colours used in the restaurant industry are blue and red as they are associated with an increased appetite. You are not limited to these colours. Orange and yellow are considered appetite triggers as well.

Colour can also be used to strengthen a mental association. For instance, you could use shades of green for a vegan or farm-to-table restaurant to enhance the idea of natural and fresh leafy greens.

Words Matter

There is no more powerful tool to market your than the quality of the words you choose to describe the food you serve. A study, conducted by The Food and Brand Lab at Cornell University, found that food items with descriptive menu labels increased the total sales by 27% when compared to the same food items with factual labels containing no additional descriptive wording.
The Food and Brand Lab study broke the puzzle down further, suggesting that different descriptive language genres created distinct emotional responses for consumers. The study listed the following categories of descriptive language as having the most substantial emotional impact:

  • Geographic: These terms associate a food with its place of origin. American BBQ is an excellent example of a menu item that relies on Geographic descriptive words (Kansas City BBQ, Texas BBQ, Southern BBQ)
  • Nostalgic: These terms conjure comforting memories with descriptive words like “old fashioned”, “traditional”, “Grandma’s”, or “homemade”.
  • Sensory: These descriptive terms evoke strong sensory reactions using words like “succulent”, “velvety”, “mouth-watering”, or “refreshing”.
  • Branded: Descriptive terms that humanise a dish by tying it to its creator as in “Chef Andrew’s Famous Fried Fish” or “Lady Marmalade’s Peach Preserves”.

Soften The Pricing

Finally, the way that the presentation and style of the pricing information for individual menu items can have an impact on the popularity of the item. The Center for Hospitality Research study showed that diners were willing to pay significantly higher menu item prices when the prices did not contain an explicit monetary reference like the words dollar, pound, or euro or their representative symbols.

Marketing relies heavily on the psychology of human behaviour. These menu engineering tricks and tips will help you bring the marketing strategies employed by the world’s top brands into effect on your own business. You do not need to implement every one of these options. Feel free to pick and choose the ideas that are the best match for your particular restaurant and your unique customer base. You never know what a big difference, even the smallest change could make. A year from now, you may be telling the story of how the UK National Lockdowns made your business a smashing success. Stranger things have happened.