Menu engineering is a strategic approach to designing and pricing a menu in a way that helps to maximises your profitability and helps to influences customer purchasing behaviour. It involves analysing the performance of individual menu items based on their popularity and profitability. Here are the key components of menu engineering.
This always a good starting point when you are looking into your menu. Contribution margin is the difference between the cost of producing a menu item and its selling price. It helps to determine the profitability of each item. Contribution margin indicates how much revenue from sales is available to cover fixed costs and contribute to profit.
By understanding the contribution margin of each menu item, a restaurant can identify which dishes are driving the most profit. It a useful tool to use when you are making decisions about adding or removing items from the menu. Knowing which items have high contribution margins allows staff to promote them to customers which will help to boost revenue. So keeping on top of what your margins are key to having a profitable menu.