One of the main obstacles faced by operators is a lack of data. Many kitchens do not have access to the comprehensive data they need to conduct a detailed menu analysis. Time is another factor – running a busy kitchen leaves little time for the collection and analysis of sales data. In addition, the people responsible for menu development may not have the skills or knowledge to perform thorough data analysis. We also find that there can be resistance to change initially, with restaurant and kitchen managers hesitant to make changes to their menu in the fear of losing loyal customers, but this can hinder the exploration of new opportunities and improvements that can lead to increased profitability.  

In this article, we’ll look at how to overcome these challenges and offer some top tips on conducting effective menu analysis. By following our advice, restaurant operators and food-led businesses can navigate the complexities of menu analysis and unlock the full potential of their menus to drive profitability and customer satisfaction.  

What is menu analysis? 

Menu analysis is a critical process for restaurant owners and managers seeking to enhance profitability and customer satisfaction. It involves evaluating the profitability and popularity of each item on a restaurant's menu to make informed decisions and strategic adjustments. 

One widely used approach in menu analysis is the implementation of a four-quadrant matrix. This matrix categorises menu items based on their profitability and popularity, providing a visual representation of their performance. 

The four quadrants in the matrix include: 

• Stars: These items are both highly profitable and popular, representing the menu's top performers. Restaurant owners and managers should actively promote and highlight these items to capitalise on their success. 
• Plowhorses: While not as profitable as stars, the reliable plowhorses remain popular among customers. These items may not yield the highest profit margins but can still contribute significantly to revenue generation and help fill seats. 
• Dogs: These items neither perform well in terms of profitability nor popularity. Identifying dogs is crucial as they can drag down overall profitability and fail to attract customers. It is advisable to remove these items from the menu or modify them to improve profitability. 
• Question marks: This quadrant represents new or recently modified items on the menu. They require evaluation to determine their potential profitability and popularity. Restaurant owners and managers need to assess whether these items should be retained or further adjusted based on customer response and market demand. 

Apart from the four-quadrant matrix, various tools and techniques can facilitate a comprehensive menu analysis. Sales data is instrumental in tracking the number of units sold for each menu item, enabling a clear understanding of their popularity. Cost data allows for monitoring the expenses associated with each item, aiding in evaluating their profitability. 

Customer surveys play a significant role in menu analysis as they provide valuable feedback from customers about their preferences and opinions regarding specific menu items. Understanding customer sentiments can guide decision-making processes and help prioritise improvements or modifications.   

By leveraging these data sources and employing menu analysis techniques, restaurant owners and managers can make informed choices to optimise their menus, enhance profitability and meet customer expectations. 

Business benefits of effective menu analysis 

Conducting regular menu analysis brings a host of fantastic benefits for restaurants and food businesses, helping them stay flexible, agile and responsive to ever-changing trends and customer preferences. By treating their menu as a constant work-in-progress, businesses can ensure their offerings are always in line with the latest market demands and remain consistently profitable.  

Let's explore some of the business benefits of conducting regular menu analysis:  

Boosting sales:

With menu analysis, you can uncover your best-selling items and understand your customers' preferences. This knowledge helps you to strategically promote and highlight these popular menu options. You can also look to increase your sales and revenue through customer loyalty programs and special offerings.

Enhancing profitability:

By examining food cost percentages, you can identify opportunities to optimise profitability. This might involve adjusting portion sizes, tweaking ingredient ratios or phasing out low-profit items. Maximising the profitability of your menu will improve your overall financial performance. 

Trimming business costs:

When you identify unprofitable or underperforming menu items, you can take steps to eliminate them. By doing so, you can reduce food waste, minimise inventory costs and streamline your operations. Additionally, finding cost-effective ingredient substitutions or portion size adjustments can optimise your cost structures and drive greater financial efficiency. 

Delighting customers:

You can gain valuable insights into customer desires and tastes through menu analysis. This knowledge helps you to align your menu offerings with their preferences, resulting in increased customer satisfaction and loyalty. Crafting a well-curated and customer-centric menu creates positive dining experiences and fosters repeat business. 

Sustainable practices:

Menu analysis identifies menu items with low demand or excessive food waste. By removing these items or modifying their preparation methods, you can minimise food waste, reduce costs and contribute to a more sustainable operation. 

Effective inventory management:

Once you have identified your best and least performing menu items, you can improve your inventory management practices. This means making sure popular items are consistently available and reducing the risk of ingredient shortages to improve operational efficiency and maintain customer satisfaction. 

Streamlined operations:

Through menu analysis, you can streamline your menu by removing unnecessary items. This simplification optimises your preparation processes, reduces complexity and enhances overall efficiency. By saving time and resources, you can focus on providing exceptional service and delivering an outstanding dining experience. 

10 top tips for conducting menu analysis and creating an effective menu 

Our product specialists work directly with food-led business operators to optimise their menu analysis processes and create effective and profitable menus.  

We’ve gathered some of the top tips from our team for conducting menu analyses and creating an effective menu: 

1. Gather your menu data: Start by collecting all the important information about your menu items prices, sales data and food costs and identify your stars, plowhorses, dogs and question marks. Access Procure Wizard analyses your data for you, which makes this step really easy. 

2. Calculate profitability: It's time to calculate your food cost percentage. Simply divide the food costs of a dish by its menu price and multiply it by a hundred to get the percentage. While you want a low food cost percentage to indicate good margins, be careful not to set it too low, as it might mean your dish is overpriced or compromising on quality. Industry standard sets ideal food cost percentage at around 30%, which can help you benchmark your own figures. Don't forget that adjusting prices strategically can make your items more appealing without hurting your bottom line. 

3. Keep an eye on the competition: Take some time to study your competitors' menus. By understanding what other businesses in your field are offering, you can find opportunities to stand out. Look for new trends that might work well for your establishment and consider factors like timing, seasonality and special offers to carve out your own unique niche. 

4. Embrace dietary requirements: Show your commitment to inclusivity by ensuring your menu caters to various dietary needs. For example, offering dishes that cater (or can be customised) for vegan, vegetarian or gluten-free customers will help you to appeal to more people.

5. Make it a team effort: Don't go at it alone! Involve your entire team in the menu analysis process. Seek input from different departments, such as purchasing, kitchen staff and servers. You can also gather valuable insights from your customers through surveys and feedback forms. Remember, sometimes what people say they want may not align with their actual choices, so rely on data-driven insights to make informed decisions. 

6. Spot new opportunities: Menu analysis isn't just about individual dishes; it's also about how they work together. Look for opportunities to upsell, create meal deals or offer meal combos that can boost revenue. This analytical, data-driven approach can help you discover new ways to boost profitability and highlight different menu items. 

7. Minimise ingredient waste: Take a closer look at your ingredient usage to reduce food waste. Avoid recipes that require uncommon ingredients that can't be repurposed elsewhere. Menu analysis allows you to optimise ingredient usage and be prepared with alternative options if certain ingredients become unavailable. 

8. Consider all cost factors: Remember to factor in other costs beyond food expenses. Consider preparation time and energy costs when making menu decisions. Calculate the direct costs associated with recipe preparation and assess how equipment requirements and expertise impact your bottom line. By considering these factors, you can make well-rounded menu choices. 

9. Timing is key: Remember to conduct menu analysis at regular intervals, considering factors such as changing seasons and annual data. Adjust your menu accordingly to capitalise on seasonal ingredients, incorporate holiday specials or align with customer preferences during specific times of the year. Stay agile and responsive to market trends to keep your menu fresh and enticing. 

10. Leverage technology for accuracy and efficiency: Take advantage of technology solutions like Access Procure Wizard's recipe and menu engineering module to streamline your menu and recipe costings. Keep your data accurate and up to date by integrating supplier ingredient information and pricing changes. Utilise features like allergen analysis, stock integration and EPoS integration to achieve transparency and improve overall profitability. 

Ready to streamline menu management in your business?  

Menu analysis is a vital tool for food-led operators to optimise their menus, improve profitability and meet customer demand. However, lack of resources and data-driven insights can be challenging. In this article, we’ve looked at what menu analysis is, how it can benefit your business and shared some of our top tips for success.  

Access Procure Wizard is a powerful purchase to pay tool that can greatly simplify and streamline the menu analysis process. With its recipe and menu engineering module, operators can easily analyse cost, waste, sales and profitability. By automating calculations and integrating supplier ingredient information, pricing changes, allergen analysis, stock management and EPoS systems, Access Procure Wizard ensures accurate data and provides a comprehensive solution for menu management. This technology saves operators time, improves efficiency and enables them to make data-driven decisions with confidence. 

By adopting tools like Access Procure Wizard, operators can overcome common challenges, enhance their menu analysis processes, and focus on delivering exceptional dining experiences. With the benefits of automation and streamlined operations, operators can stay ahead in the competitive food industry, optimise profitability and provide memorable culinary offerings for their customers. 

If you would like to learn more about how we could help your team why not arrange a demo. 

You might also be interested in:

• Menu engineering and costing software
• Watch our menu engineering software in action in our short demo video
• How to execute precision budget control in your restaurant - watch on-demand webinar