What is Menu Analysis?
To keep your menu as profitable as possible, it’s important to routinely assess each menu item’s contributions to profits. Our Menu Analysis 2x2 compares each item’s profitability and popularity to give you clarity as to which dishes should be kept and promoted or tossed to make room for something more profitable.
The chart is separated into four quadrants: Plow Horse, Dog, Star, and Puzzle. (As fun as those names are, we can’t take credit for them because they’re inherited from the industry.) Each quadrant has a few recommendations on what can be done with those menu items to improve profitability and how MarginEdge makes menu engineering something few had time for in the past into an easily accessible tool for our users today. We’ll look into each category and discuss actionable ways in which you can make powerful, data-driven decisions about your menu.
Note: We recommend only viewing one or a few sections of your menu at a time (appetizers, entrees, sandwiches) to level-set profitability and popularity expectations for similar items.
What is a Plow Horse? Low Profit, High Popularity
Dishes that fall under the Plow Horse category have both higher relative food costs to the price and high popularity, meaning they’re less profitable for you, but your customers love them. Take for instance poke bowls. Sashimi-grade fish keeps plate costs high (low profits for you) and no one can resist shoyu salmon or spicy ahi over a steaming bowl of rice (a big hit with your customers).
Since raising prices may hurt the popularity of the dish, you could first try lowering the food costs of the dish without changing what customers are loving about it. Clearly the dish is a hit, so think about ways that you might be able to lower food costs outside of changing the dish’s ingredients.
Here are some ways to do that:
- Since this is a high-volume item, evaluating your prep process and seeing if you can lower waste/increase yield can make a big impact.
- You can try reducing portion sizes.
- Promote the dish along with a low food cost item to offset the margins lost from your Plow Horse.
- Instead of lowering costs, you could try raising the menu price.
In the case of poke bowls, you can increase your lower cost toppings like veggies, and use less proteins. You can also figure out how playing with portion sizes and menu price will impact margins in our Recipes module.
What is a Dog? Low Profit, Low Popularity
Dogs. Not the greatest name, and no offense to Fido, but Dog menu items have low profitability and low popularity making them the worst things to have on your menu from a financial point of view.
We understand that while restaurants are businesses, not every decision is made from a purely financial standpoint and there can sometimes be emotions involved. Say for instance you use your great-grandmother Gertie’s clam chowder recipe on the menu, but no one orders it. New England clam chowder is pretty pricey when you use fresh littlenecks straight from Cape Cod (grannie Gertie don’t mess with that canned crap), and there isn’t much of a market for it where you serve it at your steakhouse in Lincoln, Nebraska.
So, what can you do with your Dogs? There are basically three options:
- Rebrand the item as a limited-time special. This might encourage more people to order it when it’s offered and you won’t have to keep its ingredients on hand all the time.
- Rethink the recipe (like turning the clam chowder into a corn chowder).
- 86 it from your menu entirely to steer customers toward more profitable dishes or make room to add something new.
We know that making these choices can be tough, but we think great-grandma Gertie would totally understand.
What is a Puzzle? High Profit, Low Popularity
Puzzles have high margins, but not many people order them. These are in a similar position as Stars in that they are already great menu items for profitability, so opportunities for improvement really come down to how you promote them.
The first step you should take is determining why they aren’t selling. Let’s say this time you make an incredible vegan pasta dish that is cheap to make, but just doesn’t sell. Some questions to ask yourself are:
- Is the dish presented poorly or does it taste too salty?
- Is it hiding on your menu or could the description use some love?
- Is calling the dish vegan turning people off when a less divisive buzzword like “plant-based” would make it more appealing to your more carnivorous clientele?
- Sure it’s profitable when sold but is it too pricey? Would lowering the price a little entice more customers to order it?
Another promotional option you can explore is implementing an in-house competition amongst your waitstaff. Whoever can sell the most of your Puzzles wins extra PTO or another kind of prize (like a pizza party). It’s not a novel idea, but who doesn’t love a little old-fashioned competition and wouldn’t be motivated by the promise of hot cheesy, carb-laden goodness?
Minor tweaks can make a big difference in boosting a Puzzle’s popularity.
What is a Star? High Profit, High Popularity
Stars are exactly what they sound like, high profitability, high popularity menu items. You might think, ok well these are obviously working for us so why do they need to be included in menu analysis? And you’d be partially right. They don’t need much work and as the saying goes, if it ain’t broke, don’t fix it.
What Stars present is an easy opportunity to make the good even greater. Start promoting the item in any way you can. A mouth-watering Instagram and Facebook post, or an inevitably cringey TikTok can do wonders for your Stars. Your customers will know about the item before they come in and it can boost sales even higher.
If social media is not your thing, you can:
- Highlight the item on your menu by putting it in a separate box.
- Ask servers to promote the item to guests.
- Put it on a leaflet insert that the customer will have to touch while reading the rest of the menu.
Do everything you can to make your Stars shine even brighter because the effort to result ratio is in your favor.
The Bottom Line
While we’ve given you actionable ways to improve your menu’s profitability, we also want to recognize that menu analysis is far from simple and even further from easily done. Most restaurants don’t have the extra time it takes to drill down into the numbers to make educated decisions about improving Puzzles, Plow Horses, and Dogs on a monthly or quarterly basis. MarginEdge makes this process even simpler with the menu analysis function in the Recipes model. Our platform maps out your quadrants for you based on your recipes and food costs that are up to date with your most recent invoices, making these quadrants accessible to our users.
Whether it’s figuring out a way to sell more Star burgers or finding a way to break it to great-grandma Gertie’s ghost that her clam chowder just ain’t cutting it, menu analysis provides restaurant operators with data and hard numbers to navigate these decisions confidently.